Swiss-based Axpo and German LNG Terminal have signed a Heads of Agreement (HOA) for a long-term capacity contract for the later proposed terminal to be built in Brunsbuettel, norther Germany.
The firms have not specified how much of the terminal's 3.5 MMT/Y expected capacity has been secured. They also did not disclose financial details and the agreement’s period.
German LNG Terminal is a joint venture of Gasunie, Vopak and Oiltanking (a subsidiary of the Marquard & Bahls AG) which plans to build the country’s first land-based LNG imports terminal in Brunsbuettel.
Axpo said that it has been active in global LNG markets for nine years now and offers tailor-made physical LNG supply and hedging solutions. “LNG is expected to gain further importance as an energy source and will be able to increase its market share in Europe. Our goal is to further optimize the delivery of LNG to our customers together with German LNG Terminal.”
German LNG Terminal said that the preparations for the terminal’s permitting approval process are underway as it plans to apply for the required permit for the terminal soon. “The investment decision is scheduled for the end of 2019. After receiving the necessary permits, construction work could then start in 2020 with the terminal presumably being operationally by the end of 2022.”
The presence of the terminal’s adjacent port of Hamburg and the industrial companies located in the region represents an attractive business environment. Via the Kiel Canal, in the direct proximity of the intended terminal, the Scandinavian countries and the Baltic States can easily be reached.
The €400 million ($500 million) LNG imports facility would also give the country an alternative gas supply to pipeline imports from Russia and Norway.
Last year, RWE had signed a long-term deal with German LNG for capacity at the planned terminal that will guarantee the firm "substantial annual capacity" at the planned facility. Negotiations with other interested parties for Brunsbuttel LNG capacity are continuing, while the engineering work for the permit approval process is "progressing well", German LNG had said.
Backgrounds:

On 20 Apr. 2018, Germany's economy and energy ministry announced that the country’s new government plans to add LNG infrastructure with the planned import terminal at Brunsbuttel the most likely project as the cleaner fuel will become key to reducing shipping emissions. The ministry added that once there is an established business case by the project developers, talks about the realization will start.
On 17 Jan. 2018, Gasunie LNG Holding, Oiltanking and Vopak LNG Holding announced that they are in the process of establishing the joint venture "German LNG Terminal". The purpose of the joint venture is to build, own and operate an LNG import terminal in northern Germany.
The erminal will also provide LNG distribution services. “To attract interest from the market and to gain detailed insight in customer demand, an Open Season launched today.”
In July 2017, the three companies received EU antitrust approval to establish a joint venture. Subject to, among others, the outcome of the Open Season start of construction of Germany's first LNG terminal is envisaged after final investment decision in 2019, to be ready for operations in Q4 2022.

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Source(s) GLNGI Staff, mage courtesy of German LNG Terminal