Thursday, June 28, 2007
Industry News - RWE Plans LNG Import Terminal At Wilhelmshaven
June 28, 2007
Business Monitor International
German utility RWE has announced plans to construct a liquefied natural gas (LNG) terminal at Wilhelmshaven in northern Germany. It will develop the project alongside US firm Excelerate Energy and Germany's Nord-West Oelleitung (NOW), with which the company has signed preliminary agreements. Germany currently imports gas only via pipeline, with some 40% of its supplies being imported from Russia. The LNG terminal will enable Germany, and the broader European Union (EU) member states, to diversify their gas supplies.
The companies aim to develop a German GasPort. They are considering using Excelerate's technology and knowledge to transport LNG on Excelerate vessels and then to regasify on board, rather than building onshore infrastructure, and supply the regasified LNG directly into the German gas grid. The project is expected to pump some 600,000 cubic metres per hour of regasified LNG into the German network by the end of 2010. This technology is considered cost efficient as no onshore regasification facility will be needed and it will therefore be capable of providing cost effective LNG to consumers. Further, the flexible delivery of gas during peak times is also a significant advantage to the companies and consumers. While the companies wait to secure project permissions from several authorities, feasibility studies are to be carried out over the next few months.
LNG As Diversification Strategy
German Gas Imports By Pipeline, 2006
Source: BP Statistical Review of World Energy, June 2007
Gas consumption in Germany now makes up more than 20% of the country's primary energy demand and accounts for 11% of power generation supply. Its share of the power market is rising fast, so gas demand should also move higher. Our estimate is for demand to rise from 88.5bn cubic metres (bcm) last year to around 102.6bcm by 2011. The country is therefore looking to build additional infrastructure to manage increasing domestic demand. A new gas import pipeline, NordStream, from Russia to Germany via the Baltic Sea is to be built by Wingas, which is a joint venture (JV) between BASF subsidiary Wintershall and Russian gas transit monopoly Gazprom. Électricité de France (EdF) has struck a deal with Germany's Energie Baden-Württemberg (EnBW) over the storage of natural gas and the construction of a pipeline and compression facility at Etzel, near the German North Sea port of Wilhelmshaven. RWE's competitor E.ON is also considering the construction of an LNG import terminal at Wilhelmshaven. The plans to construct LNG facilities are clear indicators that the country is keen to diversify its imports away from its traditional suppliers Russia and Norway in order to increase security of supply.
