ExxonMobil Signs Preliminary Wilhelmshaven LNG Deal – Uniper

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  • ExxonMobil to take a substantial share of the re-gasification capacity at an LNG floating terminal.
  • LNG companies may now deliver LNG into the German and European markets.
  • The German government may diversify away from pipeline gas arriving from Russia, Norway, and the Netherlands.
  • Suppliers, most notably Qatar and the United States, have expressed interest.

German utility Uniper on Friday said ExxonMobil had signed a preliminary deal to take a substantial share of the re-gasification capacity at a liquefied natural gas (LNG) floating terminal planned for Wilhelmshaven, says a report.

“The head of agreement (a non-binding draft) is an important step towards the realization of the Wilhelmshaven floating storage and re-gasification (FSRU) project,” said Keith Martin, Uniper’s chief commercial officer. He continued to say that, the FSRU will provide LNG companies from the United States, but also other countries from around the world, with the opportunity to deliver LNG into the German and European markets.

Alternative to Pipeline Gas

LNG is seen helping the German government diversify away from pipeline gas arriving from Russia, Norway, and the Netherlands. Suppliers, most notably Qatar and the United States, have expressed interest.

About Wilhelmshaven

The Wilhelmshaven FSRU is expected to have a send-out capacity of 10 billion cubic meters per year and will be Germany’s first LNG terminal. It is expected to begin operating in the second half of 2022. Uniper and ExxonMobil will continue their discussions over the coming months to seek binding agreements, Uniper said. Wilhelmshaven is a deep-sea port close to storage facilities and pipelines.

Agreement With Mitsui

In December, Uniper said it had entered into agreements with Japanese shipping group Mitsui OSK Lines to own, operate and fund the FSRU. Uniper has always stressed its role will be a facilitator, handling the marketing of the volumes, developing the FSRU into a multi-user facility and finding more buyers keen on booking capacity.

Longer term, it could use the capacity partly to optimize sales of LNG volumes it will be drawing from Freeport in the United States from the second half of this year, where it has separately started global marketing efforts. Uniper said it will press on with receiving operations permits from the relevant authorities for Wilhelmshaven.

How are FSRUs better?

In January, it struck a deal with Dutch firm Titan LNG to add logistics services at Wilhelmshaven. FSRUs are cheaper and quicker to build than on-shore terminals. Germany has three LNG terminal projects. Some observers are puzzled by the interest as many LNG terminals in the EU suffer from underutilization but concede new facilities will support further diversification as the market expands.

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Source: Reuters

 

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