Germany could spend billions of euros to convert pipeline for Russian gas imports to carry hydrogen

Industry news
21 February 2024
источник: Reuters
SEFE, a former subsidiary of Gazprom, which underwent nationalization and rebranding by the German government in 2022, is contemplating significant investments in the conversion of gas infrastructure for hydrogen (H2) use. According to the CEO of SEFE, Egbert Laege, the company's daughter company, Gascade, could allocate a "low single-digit billion euros" budget to repurpose gas pipelines into hydrogen carriers. Gascade is actively engaged in the "Flow" project, aiming to transform the European Gas Pipeline Link (EUGAL), a 480km high-pressure transmission pipeline originally designed for Russian gas transport from the NordStream landing point to Germany's south, into a hydrogen conduit.

The initiative gained recognition as it was included in the European Commission's list of Projects of Common Interest, positioning it for expedited permitting and access to funding from the EU's Connecting Europe Facility. Russia ceased gas filling in NordStream in 2022, disrupting gas supply to EUGAL just a year after achieving full capacity. Gascade, in collaboration with developer HH2E, has plans to convert EUGAL for hydrogen transport by 2025, connecting it to a 50MW green hydrogen project in Lubmin. Another noteworthy project by Gascade, Aquaductus, received EU approval for state aid. This 200km pipeline will transport hydrogen from an offshore wind farm in the German North Sea to the shore by 2030. The German government has committed to covering 100% of the subsidies for Aquaductus, in contrast to the typical 70% for other Important Projects.

SEFE is also considering a substantial investment of around €500 million in converting a portion of its 5.6 billion cubic meters of gas storage capacity to accommodate hydrogen. While specific investment details are pending, Laege anticipates mid three-digit million-euro expenditures for repurposing gas storage sites. The decision to invest in storage is expected this year, whereas the decision to invest in the Flow project is likely to be made between 2025 and 2028.

German utility EWE has joined the Flow project, intending to connect its salt cavern storage near Berlin to the network. Additionally, Dutch gas pipeline operator Gasunie's German subsidiary and salt cavern storage operator Storag Etzel are exploring the feasibility of developing 1TWh of hydrogen storage capacity at a salt dome in Wilhelmshaven, northwest Germany, near the port's hydrogen hub and Gasunie's Hyperlink pipeline, recently granted IPCEI status.