Germany's Wilhelmshaven LNG terminal set to start by year-end

General view of the new floating LNG gas terminal, which allows Germany to import LNG via ship from other countries, in the harbour in Wilhelmshaven, Germany, November 15, 2022. REUTERS/Fabian Bimmer/File Photo
  • Only risk to start date is weather
  • Germany races to secure alternatives to Russian gas
  • Size of ConocoPhillips enabled deal

COLOGNE, Germany, Nov 30 (Reuters) - A floating terminal for liquefied natural gas (LNG) should start operation by the end of this year, the chief executive of utility Uniper (UN01.DE), said on Wednesday, as Germany seeks to find supplies to replace Russian fuel.

"The only thing that could stop it would be (adverse) weather," CEO Klaus-Dieter Maubach told a conference organised by the Institute of Energy Economics of Cologne University (EWI).

Germany has been racing to secure new supplies following the disruption of Russian gas that has followed the Ukraine war begun in February.

A long-term LNG supply deal from 2026, struck on Nov. 29 for Germany, was made possible by the sheer size of ConocoPhilips' (COP.N) market capitalisation, Maubach said.

Its capitalisation is around $155 billion, Refinitiv Eikon data shows.

Maubach said Germany, which lacks hydrocarbon giants of ConocoPhillips' scale, needed to learn to manoeuvre in the international LNG market.

The market has different contract and pricing rules from those of the one on which Germany previously relied when Russia supplied 50% of its gas via pipelines.

The international LNG market will mean accepting higher prices, and making choices about long-term commitments, or risking exposure to possibly expensive spot market supplies, he said.

Unlike financially strong global oil majors, Uniper's finances have been shattered by the impact of the Ukraine war.

It is subject to a state bailout after its imports from Russia stopped, requiring spot purchases at elevated prices to cover its contractual obligations.

A week ago, Uniper asked for more money from the state, raising the tally for Uniper's nationalisation to more than 51 billion euros ($53 billion).

"If the state had not helped Uniper, and (sector peer) Sefe, it would have caused a domino effect, a Lehman crisis moment for the German, if not European gas supply," Maubach said.

Lehman Brothers collapsed in 2008 in the sub prime mortgage crisis, ushering in a global finance crisis.

Uniper investors will vote on the proposed deals to support it at an extraordinary general meeting on Dec. 19.

($1 = 0.9661 euros)

Reporting by Vera Eckert, additional reporting by Tom Kaeckenhoff, editing by Madeline Chambers and Barbara Lewis

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Thomson Reuters

Senior power correspondent for Germany with more than 30 years experience and focused on deregulated energy markets for power and gas, companies, networks, exchanges, renewables, policy, storage, future transport and hydrogen. A German native who has studied and worked in the United States and Britain.