The Transatlantic Liquefied Gas Dispute

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BERLIN/WASHINGTON (Own report) – German Foreign Minister Heiko Maas has once again reaffirmed that the German government insists on continuing with the highly controversial Nord Stream 2 gas pipeline. Despite persistent pressure from Washington, there will be no interference in the construction of the pipeline – which has long since begun – reiterated Maas at this years annual UN General Assembly in New York. At the same time, US efforts to promote the sale of US liquefied gas to Germany are stagnating. If the liquefied gas would be priced closer to the currently much cheaper pipeline gas, it could certainly be considered, according to the Uniper company (formerly EON). Uniper is currently contemplating the construction of a liquefied gas terminal in Wilhelmshaven. However, it would not even have one-fifth of the import capacity of Nord Stream 2. Plans for constructing a terminal in Brunsbüttel, which currently have the best chances of implementation, envisage the importation of only half as much LNG – primarily to fuel ships and trucks.

Europe’s Number One Gas Hub

Following another complaint by US President Donald Trump Foreign Minister Heiko Maas once again reaffirmed at this year’s annual UN General Assembly that the German government insists on building the Nord Stream 2. The pipeline, will deliver natural gas from Russia directly to Germany, reinforcing Germany’s position as the most important gas hub of the EU. The pipeline has long-since been in construction, and is due to be completed by the end of next year. With their annual supply volume at 110 billion m³ Nord Stream 1 and 2 would be capable of satisfying almost one-fourth of the EU’s natural gas needs, which in 2017 were at 467 billion m³. Germany is the EU’s largest consumer with an annual consumption of around 95 billion m³, of which only 7.2 billion m³ was furnished from domestic sources in 2017.

Changes in the Natural Gas Sector

Over the next few years, Germany’s natural gas sector is likely to face major changes. On the one hand, due to the planned exit from nuclear and coal energy sources, “a noticeable surge in the German … natural gas sector … can be expected,” as an expert from the Federal Agency for Geological Studies and Natural Resources (BGR) confirmed.[1] At the same time, Germany’s traditional gas supplier will cease deliveries, in a few years. The Netherlands, which, in 2015, was still furnishing around 37 percent of Germany’s total gas imports, will halt exploitation of the Schlochteren field near Groningen, the source of its exports to Germany, by 2030, because the quantity and magnitudes of the earthquakes in the region of extraction have dramatically increased. Nord Stream 2 could easily fill the gap. However, the German government has also begun considering importing a certain amount of liquefied gas (liquefied natural gas – LNG) for various reasons.

LNG as Fuel

The Uncertainties on the World Market

A Gas Station for Hamburg

Not Competitive

In the hopes of favorable LNG price developments, Wilhelmshaven is now also seeking its chance. Back already in the 1970s, when the importation of liquefied gas to the Federal Republic of Germany was first being discussed, Wilhelmshaven had been in consideration as an LNG terminal location. Today, Uniper (formerly EON) is again considering it as a possible terminal site. According to Uniper, this would involve a somewhat greater capacity – an annual 10 billion m³. Presumably, the company will cooperate with Qatar, still the world’s largest producer of liquefied gas. Negotiations with Qatari decision-makers were held during their recent stay in Berlin for the September 7 German-Qatari Economic Forum. US LNG would be another possibility, according to company representatives in mid September, following their talks with the US Ambassador, Richard Grenell and US Under Secretary of Energy Dan Brouillette, who were on a promotion offensive for US liquefied gas for several days in Germany. Uniper’s basic condition is that the US liquefied gas price be competitive with that of pipeline gas. It will not be in the foreseeable future.

Full article: The Transatlantic Liquefied Gas Dispute (German Foreign Policy)

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