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Energy: LNG terminal: Federal government gives billions in guarantee for pipeline construction

Energy: LNG terminal: Federal government gives billions in guarantee for pipeline construction

The federal government is supporting the LNG terminal being built on Rügen’s coast – for example with a guarantee worth billions. From the Ministry of Economic Affairs’ perspective, it is unlikely that this guarantee will be drawn.

The federal government has secured the construction of the connecting pipeline for the emerging Rügen terminal for liquefied natural gas (LNG) with almost 1.4 billion euros. The Gascade company needed the 1.38 billion euros as a guarantee in order to set up the financing. This emerges from a response from the Federal Ministry of Economics to a request from AfD member of the Bundestag Leif-Erik Holm, which the dpa has received.

It states that it is unlikely that the guarantee will become due, as the Federal Network Agency has already promised the gas network operator Gascade that it will be able to recoup the construction and additional costs through the network fees. This transfer to network fees is common.

Holm viewed the commitment as the reason why the federal government is sticking with the terminal. “The federal government is in too deep a financial situation, and there is a great risk of billions in investment ruin.” The terminal is not needed for security of supply.

The ministry’s response states that the terminal in Mukran “will essentially be realized and financed by the project sponsors Deutsche Regas and Gascade”. Gascade is building the approximately 50-kilometer-long connecting pipeline from the mainland, while Deutsche Regas will operate the special ships for landing, converting and feeding in the gas and will also take on certain construction work in the port.

Construction of the connection pipeline on the home stretch

According to its own information, the federal government is providing the state with around 36 million euros for the further expansion of the port of Mukran. In the federal budget for 2023 and in the draft for 2024, a total of around 117 million euros are estimated for charter costs for the ship “Transgas Power”. Since September 2023, the federal government has been able to have these costs reimbursed by Deutsche Regas. The company rented the ship. It will be used as a floating terminal in Mukran from the beginning of next year. It was most recently chartered out and was used as an LNG tanker.

According to a budget ruling by the Federal Constitutional Court, the coalition has to plug billions in holes in the 2024 federal budget; negotiations are still ongoing. The budget will no longer be approved by the Bundestag this year.

The construction of the connection pipeline is on the home stretch. The approval process is still ongoing for the stationing of initially one and later two planned terminal ships and their operation. Critics see the environment and tourism threatened by the terminal. The federal government considers it necessary with reference to energy supply security.

Source: Stern

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