If there is one thing that unites German and British politicians, it is a predilection for hard hats.
Shortly before last Christmas Olaf Scholz, the German chancellor, finally had a good excuse to put one on: the opening of the country’s first floating liquefied natural gas (LNG) import terminal, which had been set up in a frankly astonishing three months.
Grinning like the Cheshire Cat in his high-vis jacket, Scholz said the private initiative backed by his government signalled the dawn of the era of “new Germany speed”.
The backdrop was the harbour at Lubmin, a Baltic coastal resort that has become a museum of failed energy policies of the past.
At its southern end is the vast concrete husk of a Soviet-designed nuclear power plant, abandoned before completion because of its slapdash communist safety standards and now slowly being dismantled by an army of builders and technicians.
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On either side of the inlet are the southern terminals of the Nord Stream 1 and 2 pipelines, built to supply Germany with gas directly from Russia but wound up by the turmoil of the war in Ukraine and then blasted into oblivion by a mysterious act of underwater sabotage last September.
Yet next to the Nord Stream 1 complex, emitting a deafening roar as it pumps American gas into the pipe networks once reserved for imported Russian fuel, is the beginning of the way out of the country’s energy predicament.
The Neptune floating storage and regasification unit (FSRU) is an aircraft carrier-sized machine for warming up supercooled LNG to a temperature where it can be used to heat Germany’s homes and power its factories.
It is at the centre of a momentous shift as the country lurches from decades of dependence on Russian gas to the much more uncertain world of the present.
The challenges are considerable. First Germany must somehow refill its underground caverns of gas to get through the coming winter, having only managed to do so last year at enormous expense and with residual supplies from Russia that are now out of the equation, because of the pipeline explosions and ongoing sanctions.
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Now its gas buyers must also contend with rising competition for shipments from Beijing as Chinese industry bounces back from the zero-Covid era.
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German officials working on energy security say they are quietly confident of hitting the target, in large part through imports they received from Norway.
On their own, the four floating LNG terminals that have sprung up around the northern coast since December make a useful but relatively small contribution for the time being, typically accounting for less than 10 per cent of the country’s consumption.
Yet they are also a symbol of Germany’s fledgling energy independence. “[This is] a signal to the markets that Germany isn’t helpless, that we don’t have our backs to the wall,” said Stephan Knabe, an entrepreneur from Potsdam who co-founded the LNG project in Lubmin.
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“The fact that gas prices are now so low has many causes, but possibly it’s because we can’t be blackmailed any more. The simple fact that you have even just one LNG terminal makes it harder for speculators to attack you and that gives you a degree of energy security, because you’re in a position to import gas without depending on just one or two pipelines.”
The dizzying speed with which the Neptune was hooked up to the gas grid after years of prevarication over LNG is also a source of encouragement that, for all its cumbersome bureaucracy, Germany can get things done when it has to.
Last February, as Russia massed troops and armour on Ukraine’s borders, Knabe and his business partner Ingo Wagner saw the writing on the wall. War was looming in Europe, and with it the likelihood that the flow of gas from Russia, the umbilical cord of the German economy, would be disrupted, if not severed altogether.
Neither had any prior experience of running an energy company. However, drawing on Wagner’s contacts from the LNG sector they built the whole edifice from scratch through trial and error, each investing a seven-figure sum from their own pockets. They consulted gas engineers from Norway, specialist solicitors from London and shipbrokers around the world.
“It was a lot of work,” said Knabe. “To be completely honest, we worked ourselves to the brink of exhaustion.”
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The pair struck a rental agreement for the Neptune by September just as the logistical problems piled up. Since there was not enough space for LNG delivery ships to dock in the harbour, they brought in a smaller “shuttle” ship to ferry the liquid gas around the headland to the FSRU.
Even with the German government smoothing their path through the thicket of regulations, the pair were still confronted with a formidable quantity of paperwork: noise and light pollution reports, conservation assessments, even a study of how the nitrous oxide from the ship’s exhaust may affect a wildflower meadow nearly a kilometre away.
Deutsche ReGas, Wagner and Knabe’s firm, is now trying to build a larger floating LNG import facility at Mukran on the nearby holiday island of Rügen in the face of opposition from environmentalists, the local mayor and others who fret that it might spoil the view.
In the long run, though, Germany has placed a hefty bet on hydrogen as the industrial fuel of the future. And in a final twist of poetic justice, Deutsche ReGas is now in talks with officials to build an array of wind-powered electrolysers that would pump “green” hydrogen into the pipes built for the defunct Nord Stream 2 terminal.
