Germany's VNG sees Rostock port as potential hub for green gas business

(Reuters) - VNG, an east German gas subsidiary of power utility EnBW, said on Tuesday it sees the Baltic Sea port of Rostock as a prime location for developing clean gas businesses, as it seeks to move away from fossil fuels in the long term.

"From our point of view, Rostock with its overseas port and an existing ammonia terminal can become a hub for international hydrogen imports into eastern Germany," said Hans-Joachim Polk, board member for infrastructure and technology.

VNG's activities in Rostock include a cooperation deal with Norway's Equinor to produce low-carbon hydrogen, aimed at providing 20% of anticipated hydrogen demand in eastern Germany by 2030, Polk said.

VNG is also working with French energy company Total Eren in building up a green hydrogen delivery partnership in Chile, which could entail shipments into Rostock of renewable or decarbonized gases in the form of ammonia.

In another cooperation, VNG is sounding out Algeria's state oil and gas producer Sonatrach with a view to possibly arranging green hydrogen imports into Rostock via Tunisian and Italian natural gas pipelines, Polk told a press briefing.

VNG was one of Germany’s biggest importers of Russian natural gas but it struggled to stay afloat last year, hit by a sharp drop in Russian gas deliveries after Moscow's invasion of Ukraine, which forced it to fill the gap in the spot market at much higher prices.

As customers across Europe baulked at sky-high prices, VNG's gas sales fell 23% last year to 588 billion kilowatt hours (kWh). However, the company managed to clinch a deal to secure its liquidity without state help.

As well as gas sales to local utilities and industry, the group has a wide range of activities in high pressure and distribution gas pipelines, storage facilities and biogas.

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