Published by Global Banking and Finance Review
Posted on January 29, 2025
By Vera Eckert
MUKRAN, Germany (Reuters) - Private German liquefied natural gas (LNG) terminal operator Deutsche ReGas says the potentially lower prices offered by state-owned Deutsche Energy Terminal to attract buyers are a threat to its business.
Germany's quest to increase LNG capacity for regasification on its shores has intensified as it seeks to replace pipeline gas no longer coming from Russia, its former main supplier.
Floating storage and regasification units (FSRUs) were built at various coastal locations in record time.
But with underground gas caverns well filled in Europe, and with LNG terminal overcapacity, it is getting tougher to attract cargoes to the new infrastructure.
"Since Christmas 2024, we have been facing unequal competition with DET," ReGas Chief Executive Ingo Wagner said to reporters, adding that state rules entail that DET must not offer slots at prices below costs.
ReGas complains that state-subsidised DET can afford to go below the price that would be considered the minimal level to recover costs.
As a private company, ReGas says it cannot match the levels.
ReGas's Deutsche Ostsee terminal is the only facility in the Baltic Sea and is crucial for shipping gas to countries such as the Czech Republic and Slovakia in the future, which are reversing pipeline directions after Russian supplies dried up.
A pipeline deal between Russia and Ukraine ended on Jan. 1 and U.S. President Donald Trump is targeting Europe to export more LNG.
DET will hold short-term auctions for regasification capacity at Wilhelmshaven and Brunsbuettel in the North Sea on Feb. 4, 5 and 6.
Its operations were approved under European Commission state aid rules last December.
Germany rushed through building Wilhelmshaven, Brunsbuettel and Lubmin, near Mukran and its forerunner, from the winter of 2022 onwards and leased ships as part of its emergency responses to the reduction of Russian gas after the war in Ukraine.
DET told Reuters that short-term auctions in December had helped ensure supply security at all times, amid muted booking interest.
"We are complying with the regulatory requirements for the marketing of regas capacity for our terminals," a DET spokesperson said.
The auctions are for services around unloading regasification, send-out and storage.
(Reporting by Vera Eckert, Editing by Louise Heavens)
