The country's floating LNG terminals will reach the necessary capacity no sooner than 2026, the Economy Ministry estimates
Germany is a long way from fully substituting Russian pipeline gas supplies with liquefied natural gas (LNG), estimates by the country's Economy Ministry show.
According to a document published on the Bundestag website, Germany imported 55 billion cubic meters (bcm) of Russian natural gas in 2021. The document also shows that Germany's new Floating Storage and Regasification Units (FSRUs), which are currently being installed in a number of ports to allow the import of LNG, may reach a similar capacity no sooner than in 2026.
By 2030, those capacities are projected to increase to 76.5 bcm, or about 80% of total German gas consumption in 2021. However, the ministry notes that even once the terminals go online, the global LNG market may not have enough capacity to cover additional demand, which could push these dates further.
The ministry notes that the country's gas storage facilities are currently well-filled, and there is no immediate danger of gas shortages. However, it acknowledges that once the stores run dry later this year and the time comes to refill them for the next heating season, Germany may face shortages. According to calculations by the Oxford Institute for Energy Studies, Germany faces a supply gap of around 30 bcm of gas this year, and the FRSUs are projected to produce less than half of this volume by the end of 2023.
"The truth is, there won't be enough in the next three to four years of LNG production capacity in the world to meet the growing demand. So the unspoken strategy is that Germany will continue to pay crazy prices and other, less rich countries go empty-handed," Christian Leye, a Bundestag Left Party representative told Bloomberg.
Germany did manage to reduce its dependence on Russian energy last year by importing LNG through European neighbors and boosting pipeline gas flows from Norway and the Netherlands. However, its gas storages were filled over the summer, when Russian gas still flowed directly to the country. Another problem is the cost of LNG imports, which is estimated to be four times more expensive than Russian pipeline deliveries. Germany may also face supply constraints if the Netherlands goes through with recently announced plans to shut down the Groningen gas field, the region's largest gas deposit.
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