Dunkirk to Welcome France's Largest Methane Terminal

The port of Dunkirk (in Northern France) is to host France's largest methane terminal and so position itself in the worldwide race for liquefied natural gas (LNG) procurement.

EDF Energy (one of the UK's largest energy companies) has announced its decision to invest in the Dunkirk methane terminal, together with Fluxys G (a transmission infrastructure company operating on the north-western European natural-gas market) and Total (one of the world's largest international oil and gas companies).

Out of 53 methane terminals currently operating throughout the world, five are under construction or under consideration in France.

In 2005, EDF Energy surveyed possible sites where it could establish the largest methane terminal in France. Among the sites surveyed, Dunkirk came out as the best choice, since it is one of the leading energy hubs in Europe thanks to three reasons.

The first reason is because of the quality of the port and its surroundings; it is able to service the largest gas carriers in a very short docking time, under the highest safety conditions, whilst offering long time slots.

Secondly, the geographic location of the port provides easy access for both French and other European gas networks. Finally, the port area offers the prospect of development and future operation of major industrial facilities.

The Dunkirk-methane-terminal investment represents around €700 million by EDF and from €50 to €70 million by the Port Authority of Dunkirk.

The methane terminal, the commissioning of which is predicted to occur in late 2015, will boast an annual capacity ranging from 6 to 13 cubic gigametres. This capacity could be extended in a second phase to 12 or even 16 gigametres, representing 10% of current French gas consumption.

The increase in the European demand for gas, together with declining gas production in the North Sea will lead to a higher level of import. These imports will come from sources of supply that are located further afield than those used today.

This gradually increasing distance between production zones and consumption zones will bring about the speedy growth of gas exchanges worldwide, and so augment the need for such terminals as that of Dunkirk.

The share of LNG in the international gas trade is estimated to reach about 38% in 2020 (against 22% today). As a result, gas carriers appear as the crucial mode of transport for LNG in order to respond to the world's increasingly large gas consumption.

The carriers also represent a critical asset for the future balance of both European and world gas markets. This is another reason why the Dunkirk methane terminal will become increasingly important.