Germany will decide by the end of the year where to locate its first terminal for receiving liquefied natural gas (LNG), German economy and energy minister Peter Altmaier said Tuesday. That could be good news for the U.S. economy—and for U.S. political influence.
The United States is the world’s largest producer of natural gas and, in the face of an on-going trade war with China, is eager to find more ports to sell LNG into. It also wants to tilt Germany and the rest of Europe away from Russian influence, which Russia—the world’s second biggest natural gas producer—sometimes exercises by cutting off its natural gas pipelines into the continent.
Of course, one LNG terminal is unlikely to solve all of these issues.
Germany is a key player in on-going negotiations between the U.S. and EU over tariffs on trade, and Altmaier said the LNG plan was “a gesture to our American friends,” Reuters reports. But most of Germany’s natural gas imports come from Russia, and it is still building a pipeline, Nord Stream 2, to bring natural gas directly from Russia.
“Europe is also becoming more, not less, dependent on Russian natural gas,” Steven Winberg, assistant secretary of fossil energy, warned during a Senate hearing last week. Congress must approve most U.S. LNG exports.
Germany is unusual among major European countries for not yet having port facilities that can accept LNG, which requires special handling compared to natural gas, but can be converted back into gas from for overland transport via pipes.
Dutch companies Gasunie and Vopak and German company Oiltanking formed a joint venture last year that has been laying the groundwork for a €450 million ($526 million) facility in Brunsbüttel that could meet about 10% of Germany’s natural gas demand. Altmaier noted that at least two other cities are competing to be the chosen site.
Of course, the thing about a more liquid market is that you can end up business partners with your purported enemies: earlier this year, the U.S. flirted with buying Russian LNG.
