(Bloomberg) -- Construction on Germany’s first permanent liquefied natural gas terminal is due to start within a few weeks, after a final investment decision was made on the project. 

Total investment in Hanseatic Energy Hub GmbH’s plant in Stade — near Hamburg — now amounts to around €1.6 billion ($1.8 billion), with €1 billion for construction costs, according to Arturo Gonzalo, chief executive officer of Enagas SA, which will operate the facility. The Spanish gas grid company also increased its stake in the venture to 15% from 10% previously, he said at the firm’s annual general meeting.   

HEH last year estimated the planned investment volume at around €1 billion.

The project underlines Germany’s commitment to LNG after the energy crisis forced Europe’s biggest economy to wean itself off Russian pipeline supplies. The facility is set to receive its first cargo in 2027 and the project is on schedule, HEH Chief Executive Officer Jan Themlitz said in an interview. 

Two land-based facilities are also poised to open on the country’s North Sea coast around the same time. Tree Energy Solutions is aiming for a final investment decision on its land-based terminal in Wilhelmshaven by the end of this year, with operations starting about 48 months later, according to a spokesperson. RWE AG’s terminal in Brunsbüttel will start around a similar time as the one in Stade, the company said.

Germany is already receiving LNG at its floating terminals. The latest, Energos Force, arrived in Stade on March 15, and the facility is expected to commence operations within weeks. 

HEH’s business model is secured until at least 2043, after which LNG terminals are no longer allowed to handle fossil fuels in the country. Beyond that year, they must switch to clean technologies to help Germany meet its climate goals. 

As much as 90% of the plant’s capacity has been reserved by clients including EnBW AG and state-owned energy group SEFE. The remainder will be offered on the spot market, Themlitz said. 

HEH’s longterm off-take agreements also contain the option to switch volumes to ammonia at a later date. The chemical compound is so far mainly used to make fertilizers, but can also be converted into hydrogen. 

The firm last year tested the market interest for ammonia and is planning a technical study for the construction of a smaller tank specifically for that purpose, Themlitz said. 

--With assistance from Thomas Gualtieri.

(Corrects information in fifth paragraph to show Brunsbüttel terminal will open around similar time as Stade.)

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