Despite rising natural gas prices and increased demand for LNG in Europe following the cessation of Russian pipeline gas, floating LNG import terminals in France and Germany have remained largely idle. The high operating costs of these floating units have made them less competitive compared to onshore facilities.
A prime example of this issue is the Le Havre floating terminal, which was commissioned by France’s TotalEnergies in 2023 as an emergency measure in response to the energy crisis triggered by Russia’s invasion of Ukraine.
The Cape Ann, a floating storage and regasification unit (FSRU) for LNG, arrived in the port of Le Havre two years ago. TotalEnergies secured 50% of the terminal’s annual capacity, which is approximately 5 billion cubic meters, to supply LNG from its global portfolio. The remaining capacity was set to be marketed according to regulatory guidelines, as announced by the company in 2023.
However, despite its capacity to import up to 10% of France’s total gas consumption, the Le Havre terminal processed only 2% of all French LNG imports in 2024, according to vessel-tracking and port data compiled by Bloomberg.
Even TotalEnergies, which set up the floating terminal, has used it infrequently. The latest LNG shipment to arrive at the terminal was in June 2024, according to Bloomberg’s data.
The primary reason for this underuse is the high operational and regasification costs of floating units. These costs are significantly higher than those of onshore LNG terminals in France, such as those in Dunkerque, Fos Cavaou, Fos Tonkin, and Montoir-de-Bretagne.
Germany has also faced similar challenges with its floating LNG terminals, which have seen lower utilization rates compared to onshore import facilities.
Since 2022, Germany has established several floating LNG terminals to reduce its dependence on Russian gas. However, one German LNG terminal operator, Deutsche ReGas, has canceled the use of a floating storage and regasification unit after one year, citing financial losses from the investment.
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