Germans are still afraid of freezing in the dark this winter, no thanks to Canada..Despite assertions from Prime Minister Justin Trudeau that there is no business case for exporting LNG to Germany, an industry group there said the country continues to be at risk of natural gas shortages without additional infrastructure and storage capacity..And imports..According to Initiative Energien Speichern (INES), which represents 90% of German gas storage operators, the country’s energy security would be challenged in the event of a cold winter without the addition of more LNG terminals, storage facilities and even pipelines..“Without further infrastructure measures, the risk of a gas shortage in cold temperatures still exists and will probably continue to accompany us until the 2026/27 winter,” said INES head Sebastian Bleschke..“To restore gas supply security before then, not only additional LNG terminals but also additional gas storage capacities or pipeline connections are suitable. In the short term, however… there is no way around the terminals.".Germany was one of the hardest hit European countries impacted by the war in Ukraine and sanctions on Russian natural gas supplies..The presumed bombing and sabotage of the Nord Stream pipeline in September of 2022 placed the country’s energy policies under further scrutiny..Last week German utility E.ON warned all of Europe — not just Germany — could face crippling price spikes in the event of a cold winter. .Coincidentally, European futures prices for gas and electricity have trended almost 25% higher in the past two weeks, even though gas storage facilities in EU member countries, including Germany, is around 90% full. .Markets are also being roiled by labour disputes in Australia, which supplies about 10% of the world’s LNG..In other words, the Germans are looking to secure LNG supplies from wherever they can get. Unfortunately it won’t be from Canada.. Trudeau and german chancellorIn August, German Chancellor Olaf Scholtz pleaded with Prime Minister Trudeau to relieve his country's dependence on Russian natural gas by opening uo supplies of western Canadian gas. (Historically, Germany drew one third of its gas from Russia via pipeline. Trudeau brushed him off, saying there was 'no business case' to do so. Germany has since opened an LNG dock and signed a supply contract with Qatar. .In August of last year Prime Minister Justin Trudeau questioned the business case for LNG exports to Germany despite a direct appeal from Chancellor Olaf Scholz..“As Germany is moving away from Russian energy at warp speed, Canada is our partner of choice,” he said in Toronto last summer. “For now, this means increasing our LNG imports. We hope that Canadian LNG will play a major role in this.”.The prime minister forgot to tell him that Canada presently has no operating LNG terminals on any coast..According to the Canadian Energy Centre, there is indeed a strong case for exporting LNG and not just to Germany. Global LNG demand is expected to double by 2040..“Global LNG demand is skyrocketing, and it’s not just from the fallout of Russia’s invasion of Ukraine,” it said. “LNG is a reliable and lower emitting energy source that is rising in importance as the world’s population grows and nations look to get off high emitting coal power.”.Projects on Canada’s east coast would be closer to Europe than competing locations in the US, and terminals on Canada’s west coast are closer to Asia it added. Seven provinces are tied into the national distribution network and Canada could easily fill that gap with more efficient permitting and approvals, it added..Meanwhile, US LNG approvals are moving ahead at a record clip. According to analytics firm GlobalData, expect the US to account for almost half of new global supply additions between now and 2027.
