Brunsbüttel LNG Terminal

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Brunsbüttel LNG Terminal, also called Hamburg LNG Terminal or German LNG Terminal, is an LNG terminal under construction in Brunsbüttel, Germany. The facility is intended to be longer-term replacement for the interim onshore Brunsbüttel FSRU.

Location

The terminal is proposed for Brunsbüttel near the Hamburg region.

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Project details

• Operator: Gasunie
• Owner: KfW (50%), Gasunie (40%), RWE (10%)
  • Formerly: Gasunie; Oiltanking GmbH; Vopak LNG Holding BV (Vopak LNG)
• Parent: KfW (50%), Gasunie (40%), RWE (10%)
  • Formerly Gasunie; Oiltanking GmbH; Vopak
• Location: Brunsbüttel, Germany
• Coordinates: 53.9140009, 8.9760945 (approximate)
• Capacity: 10 bcm/y
  • Formerly 8 bcm/y
• Status: Construction
• FID Status: FID (2024)
• Type: Import
• Cost: €1.5 billion
  • Formerly estimated to be €1.3 billion, €1 billion
• Financing: €40 million in support from the European Commission
• Start year: 2027
  • Formerly 2026
• Associated Infrastructure: Brunsbüttel FSRU

Background

In January 2017 Dutch natural gas company Gasunie said it planned to start work that year to develop "a midsize LNG terminal in the Hamburg region" for Germany to import natural gas. The company plans to set up an import terminal of up to 3 million tonnes per annum (mtpa) to include a dedicated jetty for marine bunkering. Gasunie is looking at sites near Hamburg on the River Elbe, at Brunsbuttel and at Stade.

In July 2017 Gasunie, along with Oiltanking GMBH, and Vopak LNG Holding BV, received approval under the European Union Merger Regulation to establish a joint venture for owning and operating a 2-3 million tonne/year LNG import terminal in Germany, the country’s first. The three companies were investigating the possibility of building and operating the terminal at Brunsbüttel along the Elbe River close to the city of Hamburg. Vopak, Gasunie and Oiltanking planned to undertake feasibility studies for the site but have yet to make a final investment decision. They will now examine the technical, nautical and regulatory assessments and the permitting requirements.

In September 2018 RWE and German LNG Terminal GmbH signed an agreement to take most of the capacity from the terminal. It also included a cooperation agreement with the world's leading LNG buyer, Tokyo Gas.

In December 2018, Woodside Energy Trading and RWE signed an LNG supply deal primarily from the Corpus Christi LNG Project in Texas. According to Food and Water Europe, "Simply put, the German utility wants to buy more US LNG as Trump promotes gas riches in Europe."

As of 2019, according to Euro Petrole, preparations for the terminal's permitting approval process were underway. A "scoping meeting" took place at the end of January, 2019 in which the approving authorities, environmental organizations, experts, and others met with German LNG Terminal GmbH to discuss the subject, scope and method of the environmental impact assessment regarding the water and emissions legislation as part of the overall planning approval process. Obtaining construction approval is one of the conditions for making the final investment decision by the end of 2019. Construction work will start in 2020 with operations expected to commence in 2022.

According to Food and Water Europe, the federal state government wants to use €50 million euros of public money to fund the unprofitable €450 million euro project. Based on federal subsidy arrangements, this would automatically trigger an additional €50 million euro from the national government. Long prior to this, market analysts had questioned the financial security of the project, which authorities have continued to ignore.

In September of 2019, RWE announced that a final investment decision (FID) would be made no later than early 2020. RWE also announced that they'd chosen four prequalified potential partners and had potentially secured 5 billion cubic metres of import capacity if the project goes ahead. Potential suppliers include Qatar and the United States.

According to Food and Water Europe's 2019 profile on German gas use, "...[Hamburg LNG Terminal] would have a throughput capacity of about 5bcm per year and have access to the German gas grid. Prime Minister of Schleswig-Holstein and the Mayer of Hamburg have already announced their support for this €400-450 million project and committed to contribute €40 million. The gas imported might also be used by Yara, one of the 'Exxons of Agriculture' located close by, to produce fertilizer and is very likely to import fracked US gas. The promoter expects construction to start in 2020 and the terminal might start operating by 2023. This “German LNG Terminal” is planned to be built by Dutch Vopak LNG Holding B.V. and Gasunie as well as German Oiltanking GmbH.

As of January 2020, the terminal still faced four major hurdles prior to achieving FID. These included securing financial backing, guaranteeing sufficient commercial deals for long-term use, acquiring the relevant nautical and land-use permits, and ensuring regulatory approval for the plans.

In March of 2020, German LNG Terminal GmbH announced that it has garnered significant interest, and is ready to sign heads of agreement (HOA).

In June 2020, German LNG Terminal GmbH said it was confident of reaching a positive FID for the project not long after the end of 2020. The company said it was in the final phase of negotiating fully binding legal contracts for potentially 5 billion cubic metres of LNG imports with RWE, Germany's largest power producer. The groups also said they had agreed to explore whether the terminal infrastructure could be adapted to handle hydrogen.

In November 2020, German LNG Terminal GmbH announced that it had reached another milestone towards achieving FID after receiving a decision from German regulatory authorities exempting it from tariff and network access regulations on a long term basis. The decision remained to be reviewed by Germany's Federal Cartell Office and the European Commission. With FID being aimed for in the first half of 2021, RWE's CEO Markus Krebber also said, "We are very optimistic that we will get enough supply contracts, and also offtake contracts, to get the project over the finishing line." The comments came a week after Uniper revealed it would not be proceeding with rival plans to import LNG at its proposed Wilhelmshaven LNG Terminal due to a lack of interest in long-term contracts.

In June 2021, German LNG Terminal GmbH said that it was planning to file an application to authorities by the end of the month for planning permission.

In November 2021, the Dutch company Vopak ended its "active participation" in the project, with its CEO Eelco Hoekstra commenting that "the momentum commercially is not in full swing today." Vopak will continue to support the project, "but we'll do that in a more passive manner until conditions might change for the better," noted Hoekstra. No binding capacity contracts had yet materialised for the Brunsbuttel project to advance. It was also reported that Marcel Tijhuis, head of business development at the proposed LNG terminal, said the project faced "big challenges" ahead. Environmental permits were said to be taking longer than expected to secure, according to a source familiar with the project, making the start of the project unlikely before 2025.

In January 2022, a spokeswoman for the project was unable to provide a timeline for the project's FID, commenting: "[I]t is a very complex, cost-intensive, and long-term investment. In times of the Corona pandemic, it is more difficult than ever to make reliable statements about the exact timing of the project". A public consultation process concerning planning approval for the project was reported to be forthcoming.

In February 2022, a floating import terminal at Brunsbüttel, Brunsbüttel FSRU, was proposed in the wake of the European gas crisis and Russia's invasion of Ukraine. The FSRU was proposed to add short-term import capacity as the onshore terminal gets built. The 2022 TYNDP continued to list the Brunsbüttel LNG Terminal as a proposed terminal moving toward FID (2023) with capacity of 8 bcm/y.

In October 2022, and as development of the onshore terminal at Brunsbüttel had become one of the key longer-term projects in Germany's turn towards LNG imports following Russia's invasion of Ukraine, Gasunie announced that CS Gas North S.A. had been chosen to build the terminal, and confirmed that it was expected to be operational in 2026 with annual capacity of at least 8 bcm of gas, with a possible expansion to at least 10 bcm/y. The company also stated that the licensing procedure had started, and that it was planning to "eventually make the LNG terminal in Brunsbüttel ready for hydrogen production, thus becoming a hydrogen supply centre for northern Germany." Spain's Sener and the Cobra subsidiary of France's Vinci were selected for engineering, procurement and construction work on the terminal. Gasunie and RWE also entered deals with ConocoPhillips, Ineos and RWE to secure them as foundational customers.

In November 2022, QatarEnergy and the US firm ConocoPhillips signed two sales and purchase agreements to export 2 million tonnes of LNG annually (equivalent to 2.8 bcm/y) for at least 15 years from 2026 to the proposed onshore Brunsbüttel terminal.

In January 2023 in a press release related to the European Commission's financing of the project (see below), it was stated that "The terminal will be converted after 15 years of operation, at the latest by 2043" to import hydrogen or hydrogen derivatives.

According to the 2024 GIIGNL report, released in June, the terminal is on track toward a 2026 start date and will be ready to import hydrogen as of the beginning of its operation.

In early October 2024, a spokesperson for the project said that a positive FID had been taken within the past two weeks.

Financing

In July 2023, the European Commission (EC) approved €40 million in support for the project. The financing mechanism is explained as follows, according to the EC: "KfW will give to its co-investors a share of the dividends paid by GLNG if the project's annual return is below a fixed percentage of the total capital invested by all shareholders, including KfW. If the annual return is above a fixed percentage of the total invested capital, KfW will not share the dividends and thus no aid will be paid under the measure. The amount of aid disbursed under the measure will depend on the annual returns but is expected to amount to €40 million. KfW plans to exit the project after 15 years of operation of the LNG terminal, when the preferential dividend distribution mechanism will stop."

In October 2024, public broadcaster NDR reported that the cost of the terminal was likely more than expected and that additional state support would be required. NDR said that the government earmarked an 200 million euros from its budget over the coming years for the project, in addition to 740 million euros originally planned. The estimated cost of the project has risen from 1.3 to 1.5 billion euros.