The core network connecting ports, industry, storage facilities and power plants, including 60% from existing natural gas pipelines, will be privately financed, FNB Gas chairman Thomas Goessmann told a news conference presenting the network's plans with Economy Minister Robert Habeck.

Germany is seeking to expand reliance on hydrogen as a future energy source to cut greenhouse emissions for highly polluting industrial sectors that cannot be electrified, such as steel and chemicals, and cut dependency on imported fossil fuel.

In July, the German cabinet approved a new hydrogen strategy, setting guidelines for hydrogen production, transport infrastructure and market plans.

Part of that infrastructure is a 9,700 km core hydrogen network, with a price tag of 19.8 billion euros, for which drilling will start next year, Goessmann added.

"We know we have no time to lose. The excavators have to roll next year," he said.

A government bill to accelerate hydrogen expansion is expected this year, Habeck said.

"We will create the legislative prerequisites for maximum acceleration, lessons learned from the FSRU projects now being transferred to hydrogen," he added, referring to Germany's new floating storage regasification units which Berlin pushed ahead with following a drop in piped Russian imports last year.

The costs of the hydrogen lines should be covered for by user fees, but in light of the relatively few users, the government will make advance payments over the next 20 years to keep use affordable and to promote the ramp-up of the hydrogen economy, he added.

The fees should initially be uniform, a draft law seen by Reuters on Tuesday showed. The cabinet will meet on Wednesday to discuss the financing of the network's financing and its regulation, Habeck said.

($1 = 0.9327 euros)

(Reporting by Riham Alkousaa and Markus Wacket; Editing by Miranda Murray and David Evans)