(Bloomberg) -- German utility EnBW Energie Baden-Wuerttemberg AG agreed to import liquefied natural gas and green ammonia for 25 years as the country substitutes lower Russian supplies.
The company signed a long-term capacity booking for 3 billion cubic meters of LNG per year at a terminal in the northern town of Stade, EnBW’s trading executive director Peter Heydecker said in an interview.
That is about a quarter of the total capacity of the Hanseatic Energy Hub terminal and just a fraction of Germany’s needs. But every deal to bring more LNG to Europe’s largest economy is one more step toward diversification of supplies amid a historic crisis, according to Heydecker.
“Germany is working hard on diversifying its energy sources, gradually replacing Russian gas with LNG. And this deal is an important step towards that strategy,” said Heydecker. “In the future, we will be able to shift to climate-neutral green hydrogen.”
Germany has relied on LNG from the countries including the US and Qatar to supply its industry and population after Russia cut supplies amid its war in Ukraine. With no import terminals in the country, the government has made ambitious plans to build up infrastructure to start importing the super-chilled fuel, and passed a law to accelerate projects’ approval times.
Energy companies, such as EnBW, are now seeking agreements to reserve access to the planned LNG import infrastructure.
The start of the land-based terminal in Stade was pushed from 2026 to beginning of 2027, as the operator is working to make it ready to receive green ammonia, said Johann Killinger, managing director of Hanseatic Energy Hub. Ammonia is a carrier for hydrogen, enabling handling, transport and storage of the fuel.
All of the terminal’s customers with long-term agreements of more than 10 years will have the option to move to clean ammonia in the future, said Killinger. Germany will need to shift away from gas at some point as the country seeks to become carbon-neutral by 2045.
“We could see already small volumes of ammonia being imported via the terminal by the second half of the decade,” said Killinger, adding that new deals for long-term capacity bookings are expected to be closed in the next couple of weeks.
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