The Netherlands – In no time Dutch Gasunie is repairing a weak spot in the Dutch natural gas system: receipt and storage of liquefied natural gas. Among other things, with the unprecedented rapid construction of the floating terminal in Eemshaven. ‘Good crises do not exist, but crisis does create,’ states Ulco Vermeulen of Gasunie.
‘If we had already had twenty LNG terminals in Europe, the gas price would not have shot up so much,’ says Ulco Vermeulen, director of business development at Gasunie. ‘Of course you can contract liquefied natural gas anywhere, but you have to be able to store the gas. In that respect, we were already in a better position in the Netherlands last year than Germany, for example. We already had the Gate terminal on the Maasvlakte in the port of Rotterdam. When we started building it together with Vopak, there was quite a bit of criticism. Even with Gate’s commercial, market-oriented set-up.’ The urgency was not so clear. ‘In the first few years, the terminal could go out, but the storage was not fully utilized. That changed later.’
The importance of the Gate terminal increased in recent years, due in part to the scaling back of gas production in Groningen and higher gas prices. ‘Don’t forget that even before Russia’s invasion of the Ukraine, gas prices were skyrocketing.’ And those went completely through the roof last year. ‘Where Gate was first an interesting option, the terminal now became a necessity. Nice that we are now right in hindsight, but let’s be honest, we couldn’t have foreseen the way we did either.’ Not even the seasoned the Gasunie man with intensive contacts at Gazprom. ‘Until shortly before the Russian invasion, I didn’t see it coming either.’
The real feat of the past year was, of course, the construction of a floating LNG terminal in Eemshaven. In six months – faster than anywhere else in the world – Gasunie and various partners realized a significant expansion of LNG storage capacity in the Netherlands. And from the start there was full support from the cabinet for the plan. One phone call to Minister Rob Jetten was all it took. “He understood it immediately.
Together with the relatively simple expansion of Gate by fifty percent, the total annual capacity for liquefied natural gas in the Netherlands doubled in a short time to 24 billion cubic meters. So a lightning-fast response to the Ukraine crisis.
That is not the end of the matter. Gasunie is investigating possibilities for further temporary expansion of LNG import capacity. This involves looking at both existing and new locations. For example, can the company further expand Eems Energy Terminal and Gate with technical optimizations? Other options include the port of Terneuzen for additional floating storage.
This means that the Netherlands is more proactive than Germany, for example, even though the situation there is much more dire. Gasunie is also a major player in the transport of natural gas in northern Germany. Vermeulen has been annoyed more than once in recent years by the stagnation of the eastern neighbors. ‘We have been working for more than five years to also get a landbased LNG terminal in the port of Hamburg. Because of all the developments, we can now finally realize it. Had the terminal been there a few years ago, the problems would really have been fewer.’
‘A lot of long-term supply contracts have been signed with Qatar and the U.S., among others, but they will take effect in two to three years’
As liquefied natural gas storage in the Netherlands and the rest of Europe has increased and other supplies have also been replenished, there is now more control over market developments. Still, things will remain uncertain for a few more years, Vermeulen expects. ‘A lot of long-term supply contracts have been signed with Qatar and the U.S., among others, but these will take effect in two to three years. Until then, there will remain uncertainty about supply. And then various uncertainties come into play. For example, what is happening in China? Growth there has stagnated in recent years. However, if growth picks up, the demand for natural gas will also increase and the price of gas will rise as a result. And if the war in Ukraine then also lasts for years, that combination can already cause major problems. And that could be amplified if other unexpected major events occur.’