Home / Shipping News / Port News / ‘Political will’ can lead to accelerated LNG import terminal deployment: GIE

‘Political will’ can lead to accelerated LNG import terminal deployment: GIE

Europe can deploy new LNG import infrastructure far more quickly than in the past when there is the “political will” to do so, a senior official from industry group Gas Infrastructure Europe said April 6.

GIE deputy secretary general Roxana Caliminte, speaking during a Eurogas-organized webinar, also said it would be important for Europe to lock in long-term LNG supply agreements to guarantee imports.

“We are working in very fast-paced times. We’ve got to be careful to do things right,” Caliminte said.

Countries across Europe are currently rushing to secure new LNG import infrastructure as they look to cut Russian pipeline imports, with plans being made to realize numerous projects — both old and new — in record time.

Most of the plans are for floating LNG import facilities — known as FSRUs (floating storage and regasification units) — which can be installed more quickly than onshore, permanent import terminals.

“Germany, Italy, France, Poland, Greece, the Netherlands — they are betting their best cards on this infrastructure,” Caliminte said.

She said that it usually takes three-to-five years to build an onshore LNG terminal. But, she said, when there is the “political will” this time frame can be reduced.

In the case of FSRUs, the time frames are shorter, and can be shortened still, she said.

“FSRUs are a very flexible and quick option to bring more LNG to Europe. It can take as little as 18-24 months. But today we are seeing an accelerated process — it would take up to half of the initial timing at 12-18 months,” Caliminte said.

“Where there is a will, there is a way.”

Germany is planning to deploy three FSRUs in the near future, while Italy has plans to install two new FSRUs this year.

The Netherlands has signed a deal to deploy an FSRU at Eemshaven this year, while France, Estonia and Latvia also hope to realize new FSRU projects.

“We need to ensure a fast-track approval process for LNG import terminal projects,” Caliminte said. “Member states have to act very quickly and be willing to go beyond business as usual.”

Spanish case

Caliminte also called for improved interconnection between EU countries to help bring regasified LNG to more member states.

“In order to get maximum imports through LNG terminals, it is important that gas can be efficiently distributed throughout the entire EU, to the main consumption areas or places with storage,” she said.

“We may want to look into the Spanish case. Because they have a lot of regasification capacity, but they need to make sure this is sent out throughout Europe in a proper way,” she said.

Spain has has six operational LNG import terminals with an import capacity of 44.1 million mt/year (61 Bcm/year).

That is more than enough to meet the country’s annual gas demand, which totaled 36 Bcm in 2021, according to official data.

However, the Iberian Peninsula is poorly interconnected with the rest of Europe, with just limited interconnection with France.

There are growing calls for Spain and France to revive the stalled Midcat pipeline project to allow more regasified Spanish LNG to be sent out to the rest of Europe.
The pipeline project was effectively shelved in 2019 after regulators concluded the 120-km link across the Pyrenees was too costly and ineffective.

Long-term contracts

Caliminte said Europe also faced the challenge of securing LNG volumes. “As we speak, the challenge is to find the LNG,” she said.

“The EU wants to substitute 150 Bcm of Russian gas — this means taking out one third of the global LNG trade,” she said.

“That is not going to happen because the largest part of global LNG trade is bound in long-term and destination-specific contracts,” she said.

Caliminte pointed to Qatar as an example, where the majority of its LNG is sold to Asia under long-term contracts.

“So it is important to have an open-minded [European] Commission and allow member states to [use] such mechanisms too. There is no way around it,” she said.

Caliminte also said to secure more US LNG, there was a need for more US LNG liquefaction projects.

“US LNG liquefaction capacity is maxed out. To get more US LNG, they need to liquefy more,” she said, adding that new projects needed to be bankable.

“And in order to be bankable, they need to secure long-term contracts,” she said.
Source: Platts

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping