Germany to import US liquefied natural gas

US liquefied natural gas
© iStock/Gestur Gislason

German Chancellor Angela Merkel has agreed to open the country to imports of US liquefied natural gas.

The chancellor announced yesterday that construction would begin on a US liquefied natural gas shipping terminal in northern Germany. She characterised the decision as “strategic”, allowing the country to diversify its energy sources.

US President Donald Trump has campaigned hard to increase imports of US liquefied natural gas into Europe. He has threatened to impose tariffs on EU exports to the US and sanction the as yet unbuilt Nord Stream 2 pipeline, which will carry liquefied natural gas to Germany from Russia.

Natural gas comprises 13.2 per cent of German energy sources. Germany is the world’s largest importer of liquefied natural gas, importing 92 per cent of its gas; and most of the liquefied natural gas currently used in Germany is imported from Russia.

Merkel told local lawmakers the terminal would be unlikely to provide a return on its investment for at least a decade: aside from the considerable outlay involved in its construction, the process of extracting US liquefied natural gas is more complex than in Russia, so it will cost around 20 per cent more to import. However a German government spokesman denied the decision had been made in response to pressure from Trump.

Russia currently supplies between 50 and 75 per cent of Germany’s liquefied natural gas resources – the remainder comes from Norway and the Netherlands and the terminal has been described as a decision to avoid excessive reliance on Russian gas, as well as placating Trump by importing US liquefied natural gas.

Plans to build new liquefied natural gas terminals have been pitched by a variety of firms and dismissed by the German government several times over the last few years due to a lack of financial support.

Richard A. Grenell, the US Ambassador to Germany, said: “We’re creating jobs and we’re also deepening the trans-Atlantic relationship. The US is totally committed to bringing US liquefied natural gas to Europe and to Germany.”

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