In Win for Trump, Merkel Changes Course on U.S. Gas Imports

  • Date: 22/10/18
  • The Wall Street Journal

Chancellor calls her decision to open Germany up to U.S. liquefied natural gas a ‘strategic’ move

BERLIN—Chancellor Angela Merkel has offered government support to efforts to open up Germany to U.S. gas, a key concession to President Trump as he tries to loosen Russia’s gripon Europe’s largest energy market.

Over breakfast this month, the chancellor told a small group of lawmakers her government had decided to co-finance the construction of a €500 million ($576 million) liquefied natural gas shipping terminal in northern Germany, according to people familiar with the meeting, giving a crucial nudge to a project that had failed to get off the ground for years in a country that gets most of its gas cheaply from Russia.

Mr. Trump has intensively lobbied Europe to buy significant amounts of LNG as part of his campaign to rewrite the terms of trade relations. German and U.S. officials said Berlin hoped embracing U.S. gas might help solve a protracted trade dispute and possibly even defuse threats by Washington to sanction Nord Stream 2, an unbuilt German-Russian gas pipeline that would double Russia’s existing gas export capacity to Germany.

As she briefed lawmakers from Germany’s northern coastal region, Ms. Merkel didn’t describe her change of mind as a defeat but as a “strategic” decision that could pay off in the longer term, according to the people. Experts agree that opening up its energy market won’t have an immediate economic benefit for Germany, but it could eventually help the country diversify.

For years, plans to build an LNG terminal by several groups were stalled because there was no government support that would make such a project economical. On Oct.16, less than a week after the meeting, an international consortium filed its first official bid for state support for a terminal in the northern town of Stade, near Hamburg.

A ceremony took place on a terrace overlooking Berlin’s landmark Brandenburg Gate in the presence of senior politicians and U.S. Ambassador Richard A. Grenell, a confidant of Mr. Trump and the president’s main conduit in his lobbying effort.

“We’re creating jobs and we’re also deepening the trans-Atlantic relationship. The U.S. is totally committed to bringing U.S. LNG to Europe and to Germany,” Mr. Grenell said.

A ship lays pipe for the Nord Stream 2 gas pipeline, which will carry Russian natural gas to Germany.
A ship lays pipe for the Nord Stream 2 gas pipeline, which will carry Russian natural gas to Germany. PHOTO: SEAN GALLUP/GETTY IMAGES

How much support Berlin will provide and in what form—cash subsidies, loans, credit guarantees, loss protection for investors, or a mixture of the four—remains unclear. But the government has already decided to fast-track the review of the application, according to people familiar with the process, making it likely that the decision will be made by the end of the year.

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