Securing Energy for Europe Holding GMBH (SEFE) has signed up for a 20-year purchase of 2.25 million tons per annum (MMtpa) from Venture Global LNG Inc., in a deal that is touted to make the USA company Germany’s biggest supplier of liquefied natural gas (LNG) following a war-induced shift away from Russian energy.
The agreement raises German subscription to Venture Global to 4.25 MMtpa of LNG on 20-year terms, which would make the Virginia state-based company the top supplier of the fuel for Europe’s largest economy, according to a joint press release with SEFE last week.
Energie Baden-Wuerttemberg AG (EnBW) earlier signed a pact with Venture Global for two MMtpa of LNG for 20 years, announced October 6, 2022.
The supply for both contracts would come from Venture Global’s yet-to-be-constructed CP2 LNG plant. With a peak capacity of 24 MMtpa, the project is planned to rise in Louisiana state and has already been authorized by the Federal Energy Regulatory Commission. Venture Global targets to put it onstream by 2026, according to the company website.
Besides SEFE and EnBW, the other customers that have signed up for CP2 are Chevron Corp., China Gas Holdings Ltd., ExxonMobil Corp., INPEX Corp., JERA Co. and New Fortress Energy Inc.
“To date, 9.25MTPA [million tons per annum] of the 20MTPA nameplate capacity for CP2 has been sold with active discussions ongoing for the remaining capacity”, the Venture Global-SEFE statement said. “Approximately 1/3 of the current offtake agreements are with German buyers, further underscoring the importance of CP2 LNG to Germany’s long-term energy security.”
“By joining forces with Venture Global LNG, SEFE makes another important step on our mission to secure energy for German and European customers and meet the energy demand of the region”, said Egbert Laege, chief executive of SEFE, which the German government acquired from Russia’s Gazprom PJSC last year. “In delivering a substantial amount of the contracted capacity of CP2 LNG to European customers, we contribute to the further diversification and sustainability of the European energy supply.”
“Germany has acted decisively to diversify its energy portfolio and LNG will be a vital part of that mix as it seeks to strengthen its energy security while at the same time advancing environmental progress”, Venture Global chief executive Mike Sabel commented. “We are honored to support a key U.S. ally in each of these efforts.”
In response to Russia’s invasion of Ukraine February 2022, the European Union declared March 11 that year the phaseout of Russian fossil fuels by 2027 and on May 18, 2022 launched the REPowerEU outlining strategies toward that goal.
Traditionally the top market for Russian energy, the EU accounted for just eight percent of Russia’s mineral fuels exports in December 2022, with its share having consistently fallen since March 2022, when the region comprised 17.4 percent of the total Russian shipments, according to a World Bank report June 6, 2023. The EU’s intake March 2022, the month after President Vladimir Putin launched his war on Ukraine, was its highest in the January 2019-March 2023 data the World Bank presented in the world economic outlook report. The 27-country bloc’s share of imports of Russian mineral fuels stood at 2.2 percent March 2023, according to the data.
Germany’s imports of Russian mineral fuels fell about 38 million tons to around 91.58 million tons in the first year of the war compared to 2021, according to data from the nation’s statistics agency Destatis. Destatis’ database showed imports of these commodities stopped May 2023.
In a BBC report last January 18 Germany Finance Minister Christian Lindner was quoted as saying his country is no longer dependent on Russian energy: “Yes, of course Germany is still dependent on energy imports, but today, not from Russian imports but from global markets”.
LNG and EU Energy Self-Sustainability
LNG is a key component of the REPowerEU’s plan for the diversification and ultimately the security of the region’s energy supply.
REPowerEU eyes $10.9 billion (EUR 10 billion) in investments by 2030 to build LNG import terminals, pipelines and related infrastructure.
REPowerEU also promotes the common purchase by countries of gas and LNG.
In Germany, three out of six floating storage and regasification units approved in the country have come onstream early this year, the Economic Affairs and Climate Action Federal Ministry said March 3. That announcement said three more were under construction.
“Russia’s war of aggression against Ukraine has made us understand how dangerous one-sided dependencies are and that they come at a cost for us… We are therefore making Germany more resilient”, Economy Minister Robert Habeck said in that media statement.
“There is no question that the accelerated expansion of renewable energy and the building of a climate-neutral energy supply – combined with energy conservation, efficiency and the gradual phase-out of fossil fuels – are key to this”, he added. “This is the focus of our actions. To ensure security of supply during the transition period, we must, however, develop our own infrastructure for LNG for the next few years.”
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