Chancellor Merkel opens Germany to U.S. LNG imports following President Trump push

German Chancellor Angela Merkel has offered government support to open Germany to American natural gas, a key concession to U.S. President Donald Trump as he aims to loosen Russia's grip on Europe's largest energy market. In October, Chancellor Merkel announced to a small meeting of lawmakers that the German government will co-finance a €500 million liquefied natural gas (LNG) shipping terminal in northern Germany, a project that has been stalled for years. Chancellor Merkel said she didn't think an LNG terminal would break even for at least a decade and would require long-term government support. Less than a week after the meeting an international consortium filed its first official bid for state support for a terminal in the northern town of Stade, near Hamburg. The German government is fast-tracking application reviews and expected to make a decision by the end of the year.

 

Germany gets most of its natural gas cheaply from Russia and has been under increasing pressure to pull the plug on Nord Stream 2, a planned natural gas pipeline that would link Russia and Germany that would double Russia’s existing gas export capacity to Germany. The Trump administration has threated to sanction Nord Stream 2 and has intensively lobbied Europe to buy significant amounts of American LNG in an effort to renegotiate terms of trade relations. Accepting LNG from the U.S. will open Germany’s energy market providing a long-term economic benefit and diversification for the country. Critics have accused the German government of ignoring the interests of its allies by filling Russia's coffers at the time of a diplomatic conflict. In July 2018, President Trump said Germany was "captive to Russia" due to its energy policy, and "Pipeline dollars to Russia are not acceptable!" he tweeted.

 

A ceremony marking the formal announcement took place on a terrace overlooking Berlin's landmark Brandenburg Gate in the presence of senior politicians and U.S. Ambassador Richard A. Grenell, a confidant of Mr. Trump and the president's main conduit in his lobbying effort. “We're creating jobs and we're also deepening the trans-Atlantic relationship. The U.S. is totally committed to bringing U.S. LNG to Europe and to Germany," Mr. Grenell said.

 

U.S. LNG is mostly mined from underground rock formations, turned into liquid and shipped in 300-meter-long tankers. It requires special terminals for unloading, storing and converting it back into gas. The complex process means it remains around 20 percent more expensive than Russian gas, which is delivered straight to Germany mainly via the Nord Stream pipeline.


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