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Ukraine war: How Germany ended reliance on Russian gas

24 November 2022 12:46

When Vladimir Putin switched off the gas taps to Europe, Germany more than most feared a winter of blackouts. Ministers scrambled to secure alternative supplies, painfully aware that heavy dependence on Russian gas had left this industrial nation woefully exposed.

But fast forward a few months and, as lights sparkle in the Christmas markets, there is a sense of tentative optimism in the Glühwein spiced air. Germany's hastily assembled strategy to manage without Russian gas appears - for now - to be working, BBC News reports.

"Energy security for this winter is guaranteed," Chancellor Olaf Scholz told MPs in the German parliament on Wednesday morning.

Not only are the country's gas stores full; the result, in part, of a frantic - and expensive - buying operation on the world's markets.

But, upon Germany's windswept North Sea coast, engineers have just finished building - in record time - the country's very first import terminal for liquified natural gas (LNG).

LNG is natural gas which is cooled to liquid form to reduce its volume and make it easier to transport. It's then converted back to gas form upon reaching its destination.

Germany is rightly notorious for its ponderous bureaucracy; this kind of project would normally take years, but the authorities slashed away at red tape to enable completion in under 200 days.

The most important part of the terminal - a 'floating storage and regasification unit' (FSRU) - has yet to moor up. The FSRU, which is essentially a specialised ship upon which the LNG is converted back to its gas state, will be leased at a reported 200,000 euros (£172,732) a day.

But, within weeks, tankers from countries like the US, Norway or the Emirates could deliver their cargoes here to the port of Wilhelmshaven. The terminal's operator, Uniper, which is now almost entirely controlled by the German government, is coy about its suppliers but insists that contracts are in place.

And five other LNG terminals are planned. Most should be completed next year.

German industry depends on it.

"If we don't get any gas, we have to shut down the oven," says Ernst Buchow as we stand in his brick factory a half-hour drive from Wilhelmshaven.

The bricks he produces must be fired in a giant kiln at temperatures of up to 1,200C (2,192F). He hopes, one day, to transition to green hydrogen but says that will take time. For now, he's wholly reliant on a steady supply of gas.

"It's not just the politicians' fault. Industry wanted the Russian gas contracts."

Just a year ago those contracts provided Germany with 60 per cent of its gas, much of it via the Nordstream pipeline from Russia. The government was still anticipating - albeit in the face of significant political and public opposition - the opening of the Nordstream 2 pipeline which would have doubled the amount of Russian gas coming into Europe via Germany.

Today, according to the federal energy network agency, Germany's managing without Russian gas. But, to avoid shortages over the winter, its experts say LNG terminals must come online at the start of next year and that gas consumption must be reduced by 20 per cent.

Just getting to this point may be considered a huge national achievement. But it comes at a cost.

Germany's an economic heavyweight; what it wants, it often gets. Its new-found appetite for liquified natural gas is intensifying global demand.

Caliber.Az
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