Germany is set to build a liquified natural gas (LNG) terminal on the North Sea coast, making it easier to import from countries without a direct pipeline. This would see Germany’s reliance on Russian gas fall significantly.

Germany to build LNG terminal

Germany is set to start looking to import gas from other countries by building an LNG terminal on its North Sea coast, thereby reducing its reliance on Russian gas. The project is slated to be based in Brunsbüttel, a town on the North Sea coast in Schleswig-Holstein. In a statement, Economy and Climate Minister Robert Habeck said that, considering Russia’s invasion of Ukraine, “it is necessary to reduce our dependence on Russian gas as quickly as possible.”

The project will be funded by the public lender KfW, the Dutch state-owned gas company Gasunie and the German RWE energy group.

Germany wants to substitute Russian gas for LNG

Before the Russian invasion, Germany imported the majority (55 percent) of its gas from Russia through pipelines running through Ukraine and Poland, as well as under the Baltic Sea. Germany had planned on expanding its supply from Russia with the controversial Nord Stream 2 pipeline; the German government has since cancelled the approval process for the project.

Liquifying natural gas makes it easier and safer to transport, which will allow Germany to import gas from oil-producing countries that cannot be connected to Germany via pipelines, like the US or Qatar.

Natural gas is an important component of Germany’s move towards renewable energy since it can provide a reliable source of energy to cover Germany’s wind and solar power sources. The new LNG terminal, which will be operated by Gasunie, will have a regasification capacity of 8 billion cubic metres per year, before later being repurposed for the import of green hydrogen.

Energy prices continue to soar

Russia’s invasion of Ukraine has seen the country subject to massive economic sanctions, with countries considering banning imports from the country. This, among other things, has led to energy prices rising significantly. The price of Brent oil has risen by about a third since the start of the invasion, although it had also been rising drastically before that.

The German government has been reluctant to ban oil, gas and coal imports from Russia. "If we do without gas, oil and coal supplies from Russia, this means that prices in Western Europe and in the world will rise dramatically due to the expected shortages," Federal Finance Minister Christian Lindner (FDP) explained.