Higher Utilization of North Sea LNG Terminals Compared to Baltic Sea

Germany's import terminals for liquefied natural gas (LNG) located in the North Sea experienced a significant utilization rate last year, standing at approximately 65%, according to data from the Deutsche Energy Terminal GmbH (DET). These state-operated terminals are situated in Wilhelmshaven, Lower Saxony, and Brunsbüttel, Schleswig-Holstein. In contrast, the private operator of the Baltic Sea terminals, Deutsche Regas, has not disclosed specific utilization figures, but estimates suggest a notably lower performance based on information from the Gas Infrastructure Europe (GIE) organization.

In terms of energy output, the Wilhelmshaven terminal contributed about 37.5 terawatt-hours (TWh) to the network, while Brunsbüttel provided approximately 21.6 TWh. Conversely, the two floating terminals in the Baltic Sea, located at Lubmin and Mukran, accounted for around 8.5 TWh. Deutsche Regas initially deployed a terminal ship in Lubmin but later relocated it to Mukran, where it has been operational since September, after facing extended downtime for maintenance and completion activities.

The GIE reported a collective output from Germany's LNG terminals amounting to 67.6 TWh for 2024. The Federal Network Agency in Bonn, which oversees gas imports, recorded slightly higher figures, with LNG imports reaching 68 TWh last year, down from 69.7 TWh in the previous year, representing a decline of about 2.4%. Notably, LNG's share of total gas imports remains low, accounting for around 8% of the total, although this marks an increase of one percentage point from the prior year.

The establishment of LNG terminals in Germany was accelerated following Russia's invasion of Ukraine, aimed at reducing dependency on Russian gas supplies that were restricted and eventually halted. However, the terminals have faced criticism regarding their costs and environmental impacts. The German Environmental Aid (DUH) has argued that these terminals provide only a marginal contribution to energy security and has called for a halt to further infrastructure expansion.

According to the Federal Ministry of Economics, the terminals are crucial for the short- and medium-term resilience of Germany's and Europe's gas supply. Currently, the majority of Germany's gas demand is met by imports from Norway, but potential disruptions to this supply could pose risks for the country.

In the context of the Baltic Sea terminal, its geographical position is considered vital for ensuring gas supplies to not only East and South Germany but also neighboring countries in the event of supply chain interruptions.

Concerns have been raised regarding the pricing structure for gas transport through Germany's pipeline network, which is perceived as a barrier to utilizing LNG terminals more effectively. The existing tariff system is primarily designed for stable, long-term deliveries through pipelines, making it less favorable for more flexible LNG shipments by vessels.

The DET has reportedly been operating under a more competitive pricing strategy since receiving approval from the European Commission for over 4 billion euros in state support. This development has led to claims of unfair competition from Deutsche Regas, which argues that the DET's pricing undermines fair market conditions.

Despite initial rapid progress in establishing these terminals, further expansion has encountered delays. The DET has plans to launch two additional floating import terminals in the North Sea this year, but timelines for their operational status have been pushed back, with the Wilhelmshaven terminal anticipated to begin gas input by the end of March. The start date for a floating terminal in Stade remains uncertain.

Looking ahead, the transition from floating to land-based terminals is planned, with a private terminal in Stade and a semi-public terminal in Brunsbüttel expected to be operational by 2027. A private terminal in Wilhelmshaven is projected to come online by mid-2028.

Additionally, the German government has emphasized that the LNG terminals will play a role in facilitating the future import of hydrogen. However, critics argue that current infrastructure is not adequately suited for hydrogen imports, although planned land-based terminals will be designed to accommodate hydrogen derivatives.

In Lubmin, where LNG was previously imported, Deutsche Regas, in collaboration with the Norwegian company Höegh Evi, is set to use a new floating terminal to import hydrogen in ammonia form, with operations expected to commence in 2027.