Germany has long relied on Russian gas – until Russia invaded Ukraine. For the subsequent energy transition, liquefied natural gas from the USA was urgently needed. Huge LNG terminals are being built there – to the delight of the energy companies.
Port Arthur is one of the muggiest places in the USA. In the city in southern Texas on the US Gulf Coast, sweat pours down your face the second you step out of the air-conditioned vehicle. Nevertheless, many people are currently being drawn to the area – because energy companies are expanding their already large locations there. Oil and gas production is booming in the southern United States. Last but not least, this has something to do with the Russian war of aggression in Ukraine. It triggered an energy revolution in Germany. Russian gas is now also to be replaced with liquefied natural gas – LNG is the magic word. Gas ships bring chilled gas to Europe in liquid form – and they also dock in the Port Arthur area.
Gas fields in the USA are producing at record levels
According to the US Department of Energy, in 2022 the American gas fields will have produced more gas than ever before. This is mainly due to the increase in demand, especially for export, and higher natural gas prices. “It’s amazing how much LNG is shipped from this country to other countries around the world to meet their energy needs,” says Matthew Kaufman proudly. He works for the entity that centrally manages the district’s navigable waters. The waterway is an “important lifeline” for the United States and the rest of the world.
In the border region between Texas and the state of Louisiana around the Sabine Pass estuary, several energy companies have LNG plants or are having them built – including the largest US liquid gas company Cheniere, which already operates the Sabine Pass LNG plant there, which went into operation in 2016. The gas is transported to the region in pipelines. The estuary is bustling with activity. The ship “Pavilion Aranda” has its tanks filled with liquefied natural gas, the crude oil tanker “Esther Spirit” is in the estuary. Construction cranes are on the bank – the energy companies have bigger plans here.
So far only three LNG terminals in Germany: Wilhelmshaven, Brunsbüttel, Lubmin
In Germany, on the other hand, the LNG infrastructure is still in its infancy. Three LNG terminals are currently in operation: in Wilhelmshaven (Lower Saxony), Brunsbüttel (Schleswig-Holstein) and Lubmin (Mecklenburg-West Pomerania). Wilhelmshaven plays a pioneering role in this. The floating facility was the first to deliver LNG to Germany in December. Figures from the Federal Ministry of Economics and the Federal Network Agency also show that by far the most liquefied natural gas has been fed in via Wilhelmshaven.
In total, Germany imported around 33.8 terawatt hours of LNG in the first half of 2023. Compared to the total German gas import of 526 terawatt hours in this period, however, this only accounts for around six percent. Other LNG terminals are already in preparation. Among other things, in Stade, Lower Saxony, gas is also to be landed from next winter. Most recently, Mukran on Rügen was also included in the law as a possible LNG location – despite resistance from the state government in Mecklenburg-Western Pomerania.
The German government makes no secret of the fact that the new LNG infrastructure is a direct response to Russia’s war in Ukraine. The goal is to overcome one-sided dependencies with LNG, according to the Ministry of Economic Affairs. The import capacities are expected to increase from around 13.5 billion cubic meters of gas this year to around 54 billion cubic meters by 2027. For this purpose, after the floating terminals, facilities are also being built on land.
LNG boom “not driven by Europe, but by Asia”
The USA is enormously important for supplying Germany with liquefied natural gas. The Federal Association of Energy and Water Industries (BDEW) records the gas flows from the German LNG terminals without country of origin, because it cannot be clearly determined where the individual tankers come from, nor what the composition of the transported LNG is. However, the lion’s share of the LNG comes from the USA.
Kenneth Medlock from the think tank Baker Institute based in Houston, Texas, does not see the future of liquefied natural gas in Europe. “The growth in LNG production and supply has not been driven by Europe, but by Asia,” he says. The current boom is just a shift that is likely to last for a while. “The growth opportunities are still in Asia,” he emphasizes. Because the Europeans were also reluctant to sign long-term contracts.
Robert Habeck accused suppliers of extortionate prices
Corey Grindal from the US energy company Cheniere nevertheless confidently makes it clear: “We have become the largest LNG supplier for Europe.” The reason for this is the lack of Russian supplies and the ongoing demand for gas in Europe. This is good news for companies like Cheniere, because European countries are paying. This is a problem for lower-income countries such as Pakistan, because the tankers primarily go to where the most money is paid.
Economics Minister Robert Habeck therefore accused the supplying states of openly excessive prices last autumn. “Some countries, including friendly ones, sometimes achieve moon prices,” said the Green politician at the time, expressly naming the United States. The US government and corporations like Cheniere reject this criticism. “I think prices in Europe this winter will depend on how cold it is and when it gets cold,” says Cheniere’s Grindal. Last winter was a winter “that wasn’t one”.
And criticism of liquefied natural gas is not only due to the prices. Large amounts of the gas are obtained using the controversial fracking method, which is largely banned in Germany. It is pressed out of the rock using chemicals. Environmentally harmful methane escapes from the resulting cracks. The method is criticized, among other things, because of the dangers for the groundwater. Cheniere’s Grindal touts new technology to better “monitor” methane emissions. But he admits that you can’t prevent the exit either.
Source: Stern
