Germany seeks to sub-charter floating LNG terminals amid contract disputes

Germany’s economy ministry is gauging interest in its excess floating LNG (FLNG) terminals as it considers sub-chartering the ships as they sit idle following two contract cancellations, Bloomberg reported on March 21.

“Talks are ongoing with potential interested parties to sub-rent the ships if we don’t need them anymore,” an economy ministry spokesperson said at a press conference on March 21.

“It was never set in stone that we definitely would use these ships for ten years,” the official added.

Europe’s largest economy was forced to find a quick solution to its energy security after Russia invaded Ukraine in February 2022. Prior to the invasion, Germany had been the largest importer of Russian gas.

Berlin moved quickly to begin constructing both FLNG terminals and land-based facilities for importing the super-chilled fuel.

And while the rapid construction of facilities drew rave reviews for Berlin’s ability to streamline the process and eliminate red tape, cracks are now starting to show demonstrating that the buildout was not as smooth as it initially appeared.

The Stade FLNG terminal located close to Hamburg finds itself mired in controversy. State-owned operator Deutsche Energy Terminal has cancelled its contract with project developer Hanseatic Energy Hub, with both parties accusing each other of not living up to their contract obligations. Construction of the FLNG terminal was not completed before the business relationship fizzled.

Meanwhile, in January a pricing dispute erupted between the FLNG terminal operator Deutsche ReGas operating on the island of Ruegen and state-owned Deutsche Energy Terminal (DET). Regas has accused DET of unfair competition by offering lower prices to attract buyers despite state rules forbidding slots to be offered at prices below costs.

The FLNG vessel named Energos Force is now temporarily being anchored in Denmark.