CEZ Books 2 Bcm Capacity at German LNG Terminal
(Reuters) — Czech majority state-owned utility CEZ has agreed to book 2 billion cubic meters (Bcm) of annual capacity at the Stade LNG terminal in Germany from 2027, Prime Minister Petr Fiala said on Thursday.
The Czech Republic, like European peers, has been diversifying its natural gas supplies to reduce its reliance on Russia, on which it had almost exclusively relied for supplies prior to Moscow's invasion of Ukraine last year.
At a news conference with CEZ and government officials announcing the capacity deal, Czech Industry Minister Jozef Sikela said the state would look at other options as well, and also at the possibility of piped gas.
The Stade contract will run for 15 years, with an option for another 10 years.
It will replace a contract at Eemshaven in the Netherlands, where CEZ has a 3 Bcm annual capacity deal until 2027.
Sources told Reuters last week that CEZ, which is 70% state owned, shelved a plan to secure capacity for liquefied natural gas (LNG) at a new Polish terminal because it was unhappy with the conditions offered.
Stade, an inland port on the river Elbe, expects a floating storage and regasification terminal (FSRU) for receiving cargoes from LNG vessels to be ready in the winter of 2023/24.
A land-based terminal is planned for 2027 where, before CEZ, Germany's SEFE and EnBW had committed themselves as buyers already.
Hanseatic Energy Hub (HEH), the project firm for Stade, said EnBW and SEFE had secured rights to 6 and 4 Bcm annually respectively, while aside from CEZ's 2 Bcm, 1.3 Bcm would be kept available for the spot market under regulatory requirements.
HEH said all parties also had options to participate in a potential later conversion of the terminal to ammonia as a carrier for zero-carbon hydrogen imports.
"Onshore terminals will gradually replace the temporary FSRUs, so from the outset we sought to acquire long-term capacity in one of them," it quoted CEZ chief executive Daniel Benes as saying.
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