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Germany pushes ahead with LNG plans to cut Russian gas exposure

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© Reuters. FILE PHOTO: General view of the coal power plant in Neurath near Cologne, Germany, November 5, 2021. REUTERS/Wolfgang Rattay/File Photo

By Christoph Steitz

FRANKFURT (Reuters) -Germany on Saturday took further steps to cut reliance on Russian energy supplies by unveiling plans for a terminal to import liquefied natural gas (LNG), the latest sign of a policy shift in the wake of Moscow’s invasion of Ukraine.

German state lender KfW has signed a memorandum of understanding with the country’s top power producer RWE and Dutch network operator Gasunie to build the terminal in the port town of Brunsbuettel, the Economy Ministry said.

The move comes a week after Germany announced a turnaround in its energy policy to cut dependence on Russian energy imports, saying LNG, coal and even nuclear power could be used to plug the gap.

Germany, which heavily relies on Russia for gas and oil, has no LNG import terminals to date.

No investment figure was provided, but previous estimates were for 450 million euros ($492 million) to get an LNG terminal in Brunsbuettel off the ground.

The Economy Ministry said the terminal would have an annual capacity of 8 billion cubic metres and would be realised as quickly as possible.

State-owned KfW will take a 50% stake in exchange for a financial participation, the ministry said, while RWE said it will have a stake of 10% in the terminal. Gasunie, which will serve as the terminal’s operator, will hold the remaining 40%.

Economy Minister Robert Habeck said that while Germany’s goal was to create energy in a climate-neutral way, gas was needed as a fuel to manage the transition.

“It is necessary to reduce our dependence on Russian imports as quickly as possible,” the member of the Greens said in a statement.

“Russia’s war of aggression against Ukraine makes this absolutely necessary. With an LNG terminal in Brunsbuettel, we are expanding import opportunities.”

Plans for an LNG terminal at Brunsbuettel were previously advanced by German LNG Terminal, a joint venture between Gasunie, tank storage firm Vopak and Oiltanking GmbH.

German LNG Terminal on Saturday said Vopak and Oiltanking would exit the joint venture as shareholders by May as a result of the new agreement.

($1 = 0.9152 euros)

Germany pushes ahead with LNG plans to cut Russian gas exposure

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