Replacement for Russia pipelines: LNG terminals will be significantly more expensive than expected

Substitute for Russia pipelines
LNG terminals are becoming significantly more expensive than expected

The construction of terminals for landing liquefied natural gas should make Germany independent of Russian exports. But the projects are significantly more expensive than planned. The costs already amount to more than six billion euros – more than twice as much as originally thought.

Acquisition and maintenance of floating liquefied natural gas terminals (LNG) cost Germany at least three and a half billion euros more than planned. A total of around 6.56 billion euros in budget funds are currently planned, explained the Federal Ministry of Economics. In the budget for 2022, 2.94 billion euros were estimated. The increase was “necessary due to the dynamically developing situation,” it said.

The Budget Committee of the Bundestag has just approved additional money for the terminals. “In the meantime, further costs have been determined in extensive consultations with numerous stakeholders and initially forecast costs have been specified,” says the ministry. This affects, for example, operating costs and costs for additional infrastructure measures on land.

The construction of the terminals is essential for energy security. “In particular, the reduction and then the cessation of Russian gas supplies make them absolutely necessary,” emphasized the ministry. Germany does not yet have its own landing terminals. “But this new infrastructure is important for increasing pension provision and diversification,” it said.

“Traffic light has made itself susceptible to blackmail”

According to a report by “Spiegel”, documents from the budget committee also show that two of the terminals had to be chartered for 15 years instead of ten years as originally planned. Germany has therefore negotiated the option of shortening the period to ten years, but must decide on this next year.

“The traffic light coalition has made itself open to blackmail with the no alternative use of LNG gas and now has to pay billions more,” left-wing budget politician Victor Perli told the magazine. The Green budget politician Sven Christian Kindler said: “In the short term, the gas supply must be secured, but we must be careful not to create any fossil overcapacities for the future. We need more clarity in the budget committee about the costs and risks of the LNG projects.”

“Building Block for Energy Security”

Federal Minister of Economics Robert Habeck had praised the construction of the first German LNG terminal within 200 days as a central component for energy security. “Germany can be fast and advance infrastructure projects with great determination if the federal and state governments and those involved in the project pull together,” said the Greens politician on Tuesday on the occasion of the completion of the floating terminal in Wilhelmshaven.

A second terminal is also scheduled to go into operation in Brunsbüttel at the turn of the year. According to the plans, another private terminal will also be ready in Lubmin. Since two more terminals are due to be completed in the following winter of 2023/2024, the five terminals could then cover around a third of German gas requirements based on consumption in 2021. However, about 50 percent had come from Russia via pipeline in recent years. The gap is to be filled primarily through gas savings of around 20 percent.

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