German nationalized gas trader SEFE is embarking on a transformative journey, eyeing the conversion of some of its underground storage caverns and pipelines into clean hydrogen infrastructure, with potential investments reaching approximately 500 million euros ($541 million), according to CEO Egbert Laege.
In an exclusive interview with Reuters during the E-World trade fair, Laege revealed, “The exact investment calculation is not yet available, but we are talking about sums in the mid three-digit million-euro range for converting some of our gas storage sites to hydrogen.”
Laege also highlighted the significant investment requirements for converting pipelines of its transport subsidiary, Gascade, to hydrogen, estimating them to be in “a low single-digit billion euros” range.
Germany's ambitious hydrogen strategy aims to reduce greenhouse emissions and decrease dependence on fossil fuels, particularly in industries that cannot be easily electrified, such as steel and chemicals.
SEFE, renowned as a major gas supplier, operating across Germany, Britain, and seven other European markets, is now pivoting towards green hydrogen as part of the transition to low-carbon energy. Formerly owned by Gazprom, SEFE is now at the forefront of Germany's hydrogen revolution.
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The company's plans involve the conversion or creation of new cavern spaces at storage sites like Jemgum, Rehden, and Haidach, grouped under the astora division, aiming to offer them to the market by 2030. These initiatives will serve as crucial seasonal buffers, supporting the nation's hydrogen infrastructure.
SEFE's ambitious project “Flow,” a 1,200 km hydrogen pipeline with a capacity of 20 gigawatts (GW), initiated in late 2022 by Gascade, EnBW's Terranets, and VNG's Ontras, is already progressing well. Laege indicated that investments in Flow could commence as early as next year, aligning with Germany's national core hydrogen grid plan outlined in November.
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Germany, having nationalized SEFE in 2022 amid Europe's energy crisis, aims to exit the company by the end of 2028. Laege hinted at a potential divestment process starting if the company's performance remains strong over the next two years, with state credit lines totaling 7 billion euros no longer being utilized.
