A floating terminal for LNG should start operation by the end of this year, the CEO of utility Uniper, said on Nov. 30, 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 organized 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’ market cap, Maubach said.
Its capitalization is around $155 billion, Refinitiv Eikon data shows.
Maubach said Germany, which lacks hydrocarbon giants of ConocoPhillips’ scale, needed to learn to maneuver 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 nationalization to more than 51 billion euros (US$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.
(US$1 = 0.9661 euros)
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