Germany Reaches Deal With Uniper, RWE on Floating LNG Plants

(Bloomberg) -- The German government struck a deal with energy companies to import liquefied natural gas through two new terminals in an effort to alleviate a supply crunch that’s crippling the economy.

Most Read from Bloomberg

• Saudi Billionaire Made $500 Million Russia Bet at War Onset

• America’s $7 Trillion Retirement Crisis Is Only Getting Worse

• ‘Next Generation’ Moderna Coronavirus Booster Jab Approved for Use in Adults

• These Six Cities Are Emerging as New Expat Hot Spots

• Cheney Loses GOP Primary, Vows to Keep Trump From White House

Economy Minister Robert Habeck signed a memorandum of understanding with Uniper SE and RWE Supply & Trading GmbH, which will operate the floating terminals in Brunsbuettel and Wilhelmshaven, for the “temporary supply” of LNG, he said in a statement on Tuesday. The two companies will also team up with EnBW Energie Baden-Wuerttemberg AG and VNG AG to purchase the LNG.

The infrastructure is essential for Germany to increase imports of the fuel, after Russia curbed flows via a key pipeline at the end of the spring. LNG shipped from all over the world -- from the US to Qatar -- has helped Europe reduce its reliance on Moscow and fill up storage sites to prepare for winter.

Germany will be able to receive gas for the winter through the new terminals, Habeck told reporters in Berlin. The country is in talks with Qatar on supply, he said.

Germany doesn’t yet have import facilities of its own and, until now, has depended on neighboring countries to buy the LNG. But European terminals are operating close to maximum capacity since Russia cut flows to the region after being sanctioned over its war in Ukraine.

In May, Germany signed contracts to charter four floating terminals to import LNG in partnership with German utilities.

The facility at Brunsbuettel is set to start up by the end of the year, according to RWE. Construction of the Wilhelmshaven terminal has begun and operations are expected this winter, Uniper has said. Germany’s rush to build the facilities marks a u-turn in energy policy after years of resisting costly US LNG supplies.

Read more: Germany Set to Become LNG Behemoth as New Law Cuts Red Tape

Most Read from Bloomberg Businessweek

• Whole Foods’ Battle Against Black Lives Matter Masks Has Much Higher Stakes

• Andreessen Horowitz Thinks It’s Time for Adam Neumann to Build

• Chinese Shun Debt and Pile Up Savings, Threatening Global Growth Engine

• Being Thrown Off Social Media Was Supposed to End Alex Jones’s Career. It Made Him Even Richer

• Women Are Smashing the Construction Industry’s Concrete Ceiling as Labor Shortages Leave a Void

©2022 Bloomberg L.P.