Monday, July 15, 2024
HomeLNGConstruction commenced on Germany's Stade LNG terminal, where Czechia secures long-term supply

Construction commenced on Germany’s Stade LNG terminal, where Czechia secures long-term supply

Construction of Germany’s first onshore liquified natural gas (LNG) terminal has begun at Stade, close to the city of Hamburg. Led by the Hanseatic Energy Hub consortium, the terminal will be commissioned in 2027. In cooperation with the Czech government, ČEZ Group entered into contracts last year to secure a long-term annual capacity of 2 billion cubic metres at Stade.

“We have been working to secure the best possible energy future for the Czech Republic,” said Czech Minister of Industry and Trade Jozef Síkela. “That means that we are carrying on with measures to modernise the sector, such as by developing nuclear units or improving the investment environment for renewable sources, but also by taking measures to enhance our energy security, such as expanding TAL capacity, which will free us from our dependence on Russian oil. We have also been negotiating about gas supplies, to replace imports from Russia and pursuing investments into storage tanks and pipelines.”

“A fundamental component of all this is capacity for overseas import of liquified natural gas (LNG). Having secured capacity in the floating LNG terminal in the Netherlands, we also successfully secured capacity in Germany’s first onshore terminal at Stade last autumn, in cooperation with ČEZ. Three years from now it will be cover more than a quarter of the Czech Republic’s annual consumption. Its advantageous position can also help reduce gas transport fees for the Czech Republic,” the Minister underlined.

“The situation on the gas market in Europe has been stabilising, but we must be prepared for any further fluctuations,” said Vice-Chairman of the Board of Directors of ČEZ Pavel Cyrani. “A key element of our transition to an emission-free energy sector in the coming years will be a combination of renewable sources with gas power plants, which require the stable supply of fuel that LNG terminals are able to provide. Thanks to capacity at Stade, the Czech Republic will have secured long-term LNG supply, and later, after the terminal’s conversion, it will also have the opportunity to obtain emission-free gas,” emphasised Mr Cyrani.

The future Stade onshore terminal is located along the Elbe, in the federal land of Lower Saxony, approximately half-way between Hamburg and the river’s mouth on the North Sea. The terminal can be accessed by the largest LNG tankers, which are 345 metres long and it will also feature large gas storage tanks. After its completion, the total annual capacity will be 13.3 billion cubic metres of gas, of which 1.3 billion will be used for short-term spot contracts. Approximately 90 per cent of the terminal’s capacity has been booked by large European energy companies: including, aside from ČEZ, the German players EnBW and SEFE. During the first phase, the terminal will be used for the import and processing of LNG, synthetic natural gas (SNG) and biomethane, to be followed by the processing of carbon-neutral ammonia as the transport medium for green hydrogen. The shareholders of Hanseatic Energy Hub include Buss Group, Partners Group, Enagás, and Dow.

“After six years of planning and permitting, the construction phase now begins. We are proud that Germany’s first land-based terminal is taking shape in Stade – this being not only a major German but also a major European project,” said Jan Themlitz, Chairman of the Board of Directors of Hanseatic Energy Hub. “Privately initiated and funded we are benefiting from the vast experience of our shareholders. Partners Group is one of the largest private investors in the infrastructure sector. And Enagás, Europe’s leading LNG-terminal operator, will be assuming operational responsibility and is teaming up with Dow, the ideal industrial partner on the site in Stade. As an initiator, the Buss Group has played a key role in driving the project forward and bringing the shareholder-team together.”

The Czech Republic has leased capacity at the Stade terminal for 15 years, with an option to extend to 25 in connection with the use of green hydrogen. The Czech Ministry of Industry and Trade has supported the transaction by entering into a security agreement with ČEZ, as was the case with the Eemshaven terminal. At the Stade terminal, ČEZ will secure an annual capacity of 2 billion cubic metres of gas for the Czech Republic, which accounts for more than a quarter of the country’s consumption last year.

Gas consumption has been declining steadily in recent years in the Czech Republic. Whereas in 2021, Czechs used 9.4 billion cubic metres, it was down to 7.5 billion a year later and last year to a mere 6.7 billion cubic metres. This means that, year on year, an additional 800 million cubic metres were saved, which is more than 10 per cent. However the Czech Republic counts on natural gas to continue to play a significant role in the transformation of the country’s energy sector, helping to replace coal in the heating sector and, in terms of electricity, to maintain network stability using combined cycle power plants.

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