Germany Looks To Canada To Kick Russian Gas Habit

Germany is looking across the North Atlantic to Canada as it tries to reduce its dependence on Russian gas.



The German government has tasked energy giant E.ON with securing supplies of liquefied natural gas to satisfy Germany's demand, despite having no port terminal to accept the gas.



E.ON has signed a 20-year contract with Canadian firm Goldboro LNG, which exports gas from North America to markets around the world via its Nova Scotia facility.



Canada has the world's fifth largest gas reserves and produces 145 billion cubic meters of natural gas annually, exporting 55 billion cubic meters, according to the U.S. Energy Information Administration.



However, energy analysts have said the German efforts are 'too little, too late' and will do little to alleviate the hold Russian energy has on the German economy.



The crisis in Ukraine has woken Europe to the threat posed by over-reliance on Russian energy, with European sanctions over President Vladimir Putin's support for separatist groups already weakened because of Russia's leverage.



Like many nations, Germany is seeking to diversify its energy sources and decrease gas imports from Russia, which currently provides 40 percent of German gas consumption, making it Russia's largest European customer.



E.ON, a major shareholder in Turkish energy company Enerjisa, has been offered a multi-million euro budget to secure liquefied natural gas, known as LNG from as wider range of sources.



Professor Volker Quaschning, an energy expert at HTW University in Berlin, said the amount that could be imported from alternative sources would not satisfy German demand in the short term.



"The amount of LNG that can be imported in the short term is very limited," he said. "Other measures such as energy saving or the implementation of renewable energy can be established much faster."



Energy economics expert Professor Claudia Kemfert, of the German Institute of Economic Research, said dependence on Russian gas would continue because of the cost.



Unlike other European nations such as Spain and the Netherlands, Germany has no LNG terminal to receive shipped imports.



"E.ON dropped plans to construct an LNG terminal in Germany and instead built the North Stream pipeline which brings Russian gas to Germany and Europe," she said.



"Although there is now a lot of free LNG terminal capacity in places like Rotterdam, Germany missed the chance to decrease dependency on Russia and will not be able to change that soon."



Germany is the largest energy consumer in Europe. According to the EIA, Germany consumes 89 billion cubic meters of natural gas, importing 40 percent from Russia via North Stream. Gas imports from Russia costs about 15 billion euros a year.



Although it has no LNG terminal, Germany has 40 gas storage facilities with a total capacity of 21 billion cubic meters.



As well as operating some of these storage facilities, E.ON has a 25 percent stake in Rotterdam's Gate LNG terminal, which is equal to 3 billion cubic meters a year.



In the statement to The Anadolu Agency, E.ON said its Goldboro contract was part of the company's globalization strategy to reduce investment risk and reach a wider market.



www.aa.com.tr/en - Ankara