(Bloomberg) --
Germany is partnering with Nederlandse Gasunie NV and RWE AG to build a liquefied natural gas terminal in the country as Europe's biggest economy tries to wean itself off Russian energy imports.
The country's state-owned KfW bank has signed a memorandum of understanding with the two energy firms to build an LNG terminal in the northern port city of Brunsbuettel, the German economy ministry said Saturday. While Gasunie will operate the facility, the German government will own half of it via KfW.
“It's necessary to reduce dependence on Russian imports as soon as possible,” Economy Minister Robert Habeck said in an emailed statement.
The move signals that Europe sees the invasion of Ukraine as a turning point and wants to finally address its longstanding addiction to Russian energy. Germany relies on the country for more than half its natural gas, and a decision to phase out nuclear power before enough renewable capacity has been built to replace it has left the country particularly vulnerable.
Read more: Belgian Group Brings Forward Hydrogen, LNG Terminal in Germany
German Chancellor Olaf Scholz vowed last month to expand the country's LNG infrastructure, just days after shelving a $11 billion pipeline project to bring Russian gas to Europe. Berlin is also bolstering gas and coal storage, and pushing for a faster rollout of renewables.
The Brunsbuettel terminal will have an annual regasification capacity of 8 billion cubic meters, and the companies plan to eventually upgrade the site to process hydrogen derivatives such as ammonia, which can be produced with renewable-energy sources. The goal is to set up the terminal as “quickly as possible,” according to the statement.
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