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    Zeebrugge LNG Offers Capacity Extension


The plant operator had a lot of interest shown in capacity offerings for the period after the present contracts expire.

by: William Powell

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Natural Gas & LNG News, Europe, Liquefied Natural Gas (LNG), Corporate, Import/Export, Political, Regulation, Infrastructure, News By Country, Belgium

Zeebrugge LNG Offers Capacity Extension

Belgian import terminal operator Fluxys LNG is free to finalise new long-term contracts for the facility up to 2044, it said July 1. The Belgian federal energy regulator Creg has approved the reduced tariff and theLNG services agreement proposals for unloading slots and additional storage services at the Zeebrugge LNG terminal, said Fluxys.

European gas demand is looking shaky on paper, with the UK pledging to go carbon neutral by 2050 and other countries likely to join it. But while the future of Europe's gas pipeline network is not looking as secure as it did even a few years ago, the alternative, all-electric grid might be too costly. Progress is also being made on decarbonising gas.

CEO Pascal De Buck said the approval was "a milestone for Fluxys Belgium as we will secure stable return from the Zeebrugge LNG terminal up to 2044. Creg’s approval allows us to turn binding interest from the market into new long-term contracts worth roughly €1bn ($1.1bn)."

The head of Creg, Laurent Jacquet,  said tariffs will see "a marked decrease for all terminal users who unload and store LNG, and inject natural gas into the transmission system." With the costs covered after over 30 years' operation, Creg has "established a solid and stable framework for regulatory supervision in the future. These favourable conditions consolidate Zeebrugge's position as an access point for LNG deliveries to Europe," said Creg.

Today’s long-term contracts for unloading at the Zeebrugge LNG terminal expire horizon 2028. During a subscription window held from 30 April to 24 May 2019 unloading slots and additional storage services at the Zeebrugge LNG terminal were offered over subsequent periods up to 2044.

 The subscription window proved highly successful and revealed binding interest from the market for the entire unloading capacity at the facility up to 2044. Creg and Fluxys Belgium perceive the positive outcome of the subscription window process to be the result of a combination of factors:

  • Gas import needs in northwest Europe are set to rise significantly: gas production in The Netherlands and the North Sea is declining, while gas demand for power generation will increase to accommodate the phase-out of sizeable coal, lignite and nuclear power generation capacity in the region.
  • The subscription window offered an attractive tariff proposition together with optimum destination flexibility throughout northwest Europe from a strategically positioned LNG terminal: the Zeebrugge facility is directly linked into the Belgian market (ZTP), is fully interconnected with the gas systems of all surrounding markets (TTF, Gaspool, NCG, TRF and NBP) and take-away capacity from the terminal is readily available.

The new tariffs for unloading slots and additional storage will take effect 10 days after notification of the decision of Creg and new long-term contracts will now be concluded from the binding commitments made through the subscription window, Fluxys said.

The terminal began operations in 1987 and has been extensively expanded and modified since then.