The operator of Germany’s first liquefied natural gas (LNG) terminal is suing the European Commission for approving state subsidies for a competing terminal, the Hanseatic Energy Hub (HEH) reported on Thursday.
HEH, a private consortium of companies operating without subsidies, is taking the European Commission to the EU Court of Justice in Luxembourg after Brussels authorities approved subsidies from the German government for a competing project in Brunsbüttel, at the mouth of the Elbe River, northwest of Hamburg.
Germany wants to use LNG to compensate for the loss of Russian gas supplies. Berlin was previously heavily dependent on Russian gas, but quickly sought alternatives after Moscow invaded Ukraine in 2022.
HEH argues that the Brunsbüttel project could go ahead without state funding. HEH said that a normal market participant would simply have charged higher prices to customers and would have survived without state money. HEH’s lawyers also say that the aid encourages operators to be less economically efficient.
HEH, the consortium responsible for the LNG project in Stade, upstream of Brunsbüttel on the Elbe, is based in Hamburg and consists of the Hamburg port logistics company Buss-Gruppe, the Swiss private equity company Partners Group, the Spanish network operator Enagás and the US chemical company Dow.
HEH began construction of the terminal in Stade, just outside Hamburg, in June and is expected to be operational in 2027.
The European Commission has authorised the German government to support the Brunsbüttel terminal with state subsidies worth €40 million ($43 million) in 2023. Under certain conditions, this amount could increase to €125 million, according to the financing decision by the Brussels authorities.
However, the German government has considerably more money to spend: €740 million has been set aside in the 2022 budget, according to a letter from the Ministry of Finance to the Bundestag’s Budget Committee in April 2022.
The German government has a 50% stake in the company responsible for the terminal in Brunsbüttel, German LNG, through the German development bank KfW.
