Securing Energy for Europe Holding GMBH (SEFE) has signed a 20-year purchase of 2.25 million tonnes per annum (MMtpa) from Venture Global LNG Inc., in a deal touted to make the US company the largest supplier of liquids in Germany. natural gas (LNG) after a war-induced shift in Russian energy.
The deal raises Germany’s subscription to Venture Global to 4.25 MMtpa of LNG over 20 years, which would make the Virginia state-owned company the main supplier of the fuel to Europe’s largest economy, according to a joint press release with SEFE last week.
Energie Baden-Wuerttemberg AG (EnBW) previously signed a pact with Venture Global for two MMtpa of LNG over 20 years, announced on October 6, 2022.
Supply for both contracts would come from Venture Global’s yet-to-be-built CP2 LNG plant. With a maximum capacity of 24 MMtpa, the project is expected to ramp up in the state of Louisiana and has already been authorized by the Federal Energy Regulatory Commission. Venture Global aims to have it operational by 2026, according to the company’s website.
In addition to SEFE and EnBW, the other clients that have signed up for CP2 are Chevron Corp., China Gas Holdings Ltd., ExxonMobil Corp., INPEX Corp., JERA Co. and New Fortress Energy Inc.
“So far, 9.25 MTPA [million tons per annum] of the 20 MTPA plate 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 procurement agreements are with German buyers, which further underlines the importance of CP2 LNG for Germany’s long-term energy security.”
“By joining forces with Venture Global LNG, SEFE takes another important step in our mission to secure energy for German and European customers and meet the region’s energy demand,” said Egbert Laege, CEO of SEFE , which the German government acquired from Russia’s Gazprom PJSC last year. “By delivering a substantial amount of CP2 LNG’s contracted capacity to European customers, we are contributing to greater diversification and sustainability of Europe’s energy supply.”
“Germany has acted decisively to diversify its energy portfolio and LNG will be a vital part of this mix as it seeks to strengthen its energy security while advancing environmental progress,” commented Venture Global CEO , Mike Sabel. “We are honored to support a key US ally in each of these efforts.”
In response to the Russian invasion of Ukraine in February 2022, the European Union declared on 11 March of that year the phase-out of Russian fossil fuels by 2027 and on 18 May 2022 launched the REPowerEU which describes strategies to achieve this goal.
Traditionally the main market for Russian energy, the EU accounted for just eight percent of Russia’s mineral fuel exports in December 2022, with its share having fallen steadily since March 2022, when the region comprised 17.4 percent of total Russian shipments, according to a World. Bank report 6 June 2023 EU inflows in March 2022, the month after President Vladimir Putin launched his war on Ukraine, were the highest in data from January 2019 to March 2023 that the World Bank presented in the World Economic Outlook report. According to the data, Russia’s share of mineral fuel imports from the 27-nation bloc stood at 2.2 percent in March 2023.
Germany’s imports of Russian mineral fuels fell by about 38 million tons to about 91.58 million tons in the first year of the war compared to 2021, according to data from the national statistics agency Destatis. The Destatis database showed that imports of these goods stopped in May 2023.
In a BBC report last January 18, Germany’s finance minister, Christian Lindner, said that his country is no longer dependent on Russian energy: “Yes, of course Germany is still dependent on imports of energy, but today not from Russian imports but from world markets.
LNG and energy self-sustainability of the EU
LNG is a key component of REPowerEU’s plan for the diversification and ultimately the security of the region’s energy supply.
REPowerEU foresees investments of USD 10.9 billion (€10 billion) by 2030 to build LNG import terminals, gas pipelines and related infrastructure.
REPowerEU also promotes the common purchase by countries of gas and LNG.
In Germany, three of the six floating storage and regasification units approved in the country have gone into operation at the beginning of the year, the Federal Ministry of Economic Affairs and Climate Action said on March 3. That announcement said three more were under construction.
“Russia’s war of aggression against Ukraine has made us realize how dangerous unilateral dependencies are and that they come at a cost to us… So we are making Germany more resilient,” said the Economy Minister, Robert Habeck, in this press release.
“There is no doubt that the accelerated expansion of renewable energy and the construction of a climate-neutral energy supply, combined with energy conservation, efficiency and the phase-out of fossil fuels, are key for that,” he added. “This is the focus of our actions. However, to ensure security of supply during the transition period, we need to develop our own LNG infrastructure over the coming years.”
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