Belgium, (Brussels Morning Newspaper) German energy company RWE stressed the importance of building more liquefied natural gas (LNG) terminals on land to strengthen energy security.
RWE CEO Andree Stracke predicted at the Gastech conference in Milan earlier this week that Europe will not abandon Russian gas forever due to cost to citizens and companies.
“The world lives in cycles… I doubt that Europe can afford these energy prices for a long period as well,” he added.
As natural gas prices continue to rise in Europe and Russian energy company Gazprom cut gas flows, German importers are discussing the possibility of rationing gas.
Gazprom announced on Friday that Nord Stream 1 gas pipeline would remain closed indefinitely, stressing that a turbine malfunctioned and needs repairs.
According to analysts, Europe will have to import roughly 200 million tonnes of natural gas through LNG terminals in the next ten years or so to replace Russian imports.
The largest consumer of Russian gas in the EU, Germany, would need to import about 40 million tonnes of LNG to replace Russian gas imported via pipelines.
Importance of new terminals
“If you want to bring more LNG in the long term into Europe, you need more investments in land based terminals as well… FSRUs [floating storage and regasification units] are supposed to be a short term solution,” Stracke stressed.
Germany leased four FSRUs in May with the aim of importing 5 billion cubic metres per year, noting that the first two FSRUs are to arrive by the end of the year.
The country is planning to lease another FSRU with capacity of 5 bcm for the 2023/2024 winter season, which will bring the number of floating terminals to five.
EU ministers are to discuss plans to cushion the blow of the energy crisis later this week, including the proposal to impose a price cap on Russian gas and the plan to exclude gas-fired power plants from EU’s system for setting electricity prices, among other.
Stracke expressed belief that the planned price cap will not solve the crisis, adding that demand should be reduced instead.
“Politicians try to solve the pricing problem by putting caps in but this will result in less demand by definition,” he pointed out.
