Germany vows to end dependence on Russian gas by 2024 as US offers extra shipments

Germany vowed to all but wean itself off Russian gas by mid-2024 as the US said it would aim to deliver at least 15bn cubic metres of additional liquefied natural gas to the EU this year along with other suppliers.

Berlin also said it aimed to become “virtually independent” of Russian oil by the end of this year as part of announcements that promise to reshape the region’s energy market in an exceptionally short period of time.

They came as US president Joe Biden met Ursula von der Leyen, the EU Commission president, on Friday morning in Brussels on the second full day of his trip to Europe.

The announcements from Germany’s economy minister Robert Habeck underlined how Europe’s largest economy is central to efforts to slash exposure to Russia and punish its president, Vladimir Putin, for the invasion of Ukraine despite worries about the knock-on effects on consumers.

Habeck said the country can be “independent of Russian gas by all but a small portion” by as early as the summer of 2024. A ministry document said it was possible to reduce Russian gas to only 10 per cent of consumption by that time.

The ministry said it would cut its reliance on Russian oil by half by the end of the summer and come close to ending its dependence by the end of 2022. It added that Germany also aims to end its reliance on Russian coal by the autumn of this year.

Last month Germany suspended the Kremlin-backed Nord Stream 2 pipeline before gas started flowing through it as part of international sanctions against Russia.

The US’s LNG commitment, which confirmed a report by the Financial Times on Thursday, did not specify how much of the additional volumes of gas would be coming directly from America or from other countries, highlighting the difficulty of rapidly ramping up capacity and diverting contracts in the energy market.

A senior Biden administration official said the US had in recent months both ramped up its LNG exports to Europe and arranged swaps with other countries, mostly in Asia, to shift shipments to the EU.

Over the longer term, once the EU had developed more LNG infrastructure to bring in US LNG, the goals could be met more directly from America. “The point here is to replace an unreliable supplier of LNG with a much more reliable and secure partner in the US,” the official said.

The EU is rushing to phase out its dependency on Russian gas, oil and coal as quickly as possible, with Brussels targeting a two-thirds reduction in Russian gas imports by the end of the year. The drive will be tough to achieve, however, especially at a time when politicians are under intense pressure from voters to do whatever they can to bring down household energy bills.

EU leaders are meeting today for the second day of a summit in Brussels to tussle over ways of mitigating the surge in energy prices, amid divisions between different groups of member states over how deeply to intervene in gas and electricity markets in a bid to ease costs.

Officials suggested the new LNG volumes would rely heavily on cargoes getting diverted from other markets to the EU. However, the US said it expected further increases above the 15bn cubic metres target in the future, according to a fact sheet released by the White House.

The arrangement includes an EU pledge to secure demand for around 50bn cubic metres a year of additional LNG from the US until at least 2030, while remaining consistent with carbon reduction goals, and on the understanding that prices should reflect long-term market fundamentals.

The White House also said it and the EU would “undertake efforts to reduce the greenhouse gas intensity of all new LNG infrastructure and associated pipelines”.

“These steps will increase energy security, economic security and national security,” Biden said on Friday. “I know that eliminating Russian gas will have costs for Europe. But it’s not only the right thing to do from a moral standpoint, it’s going to put us on a much stronger strategic footing”.

Standing next to Biden, von der Leyen said on Friday morning that the EU was “right on track now to diversify away from Russian gas and towards our friends and partners — reliable and trustworthy suppliers.”

She said the 15bn cubic metres pledged for 2022 would be sufficient to replace Russian LNG exports to Europe.

In Germany, Habeck announced that the country was in the final stages of negotiations to secure three floating storage regasification units — vessels that can vaporise LNG. The energy companies Uniper and RWE had obtained options to use the units on behalf of the German government, he said. The ministry said the three units would provide 27bn cubic meters of gas a year.

Since Russia’s invasion of Ukraine, Habeck said the government has reduced its dependency on Russian coal imports from 50 to 25 per cent, on oil imports from 35 to 25 per cent, and on gas from 55 to 40 per cent.

“There’s a lot of momentum in other places as well, so that’s something moving significantly,” he said. “It was always assumed it would take five-seven years [to halt dependency on Russian gas] but we expect it to be in ‘24, by as early as the summer.”

Habeck said the government is preparing itself for the possibility of Russia cutting supplies, stressing that “we must not let ourselves be blackmailed.”

This story has been amended to reflect the fact the German economy ministry incorrectly stated the unit of measurement for the capacity of regasification units