PLASTICS AND ENERGY
Germany, Qatar announce LNG deal / Gulf state to supply some 2 mn t/y from 2026 / ConocoPhillips tapped as shipper
 German Chancellor Olaf Scholz leads a country struggling to find replacements for natural gas shipments from Russia (Photo: Bundesregierung/Trutschel) |
After weeks of suspense over the fate of a preliminary agreement on deliveries of liquefied natural gas (see Plasteurope.com of 03.10.2022), Germany and Qatar have agreed on a deal.
Starting in 2026, state-owned Qatar Energy (www.qatarenergy.qa) is to deliver around 2 mn t/y of LNG from the country’s North Field East and North Field South to Germany over 15 years.
The agreement was wrapped up as a commercial contract between German utilities RWE and Uniper and US-based ConocoPhillips (Houston, Texas; www.conocophillips.com), one of a number of Western energy conglomerates working with Qatar to exploit the country’s vast gas reserves (see Plasteurope.com of 15.07.2022).
Conoco is to deliver gas to the German floating terminal currently under construction near Brunsbüttel on the North Sea, one of several such facilities the country plans to erect to receive imported LNG and potentially other energy and feedstock deliveries such as ”green” hydrogen and ammonia.
Qatari Energy Minister Saad Sherida Al-Kaabi, who is also CEO of Qatar Energy, said talks are ongoing with potential German buyers about additional supplies.
Observers said the agreement was significant as prices are rising and countries and regions worldwide jockey to sign pacts and nail down LNG from gas-rich nations. China, for example, recently surprised the market by snapping up supply deals.
German Chancellor Olaf Scholz described the negotiations with Qatar as “tough”.
Starting in 2026, state-owned Qatar Energy (www.qatarenergy.qa) is to deliver around 2 mn t/y of LNG from the country’s North Field East and North Field South to Germany over 15 years.
The agreement was wrapped up as a commercial contract between German utilities RWE and Uniper and US-based ConocoPhillips (Houston, Texas; www.conocophillips.com), one of a number of Western energy conglomerates working with Qatar to exploit the country’s vast gas reserves (see Plasteurope.com of 15.07.2022).
Conoco is to deliver gas to the German floating terminal currently under construction near Brunsbüttel on the North Sea, one of several such facilities the country plans to erect to receive imported LNG and potentially other energy and feedstock deliveries such as ”green” hydrogen and ammonia.
Qatari Energy Minister Saad Sherida Al-Kaabi, who is also CEO of Qatar Energy, said talks are ongoing with potential German buyers about additional supplies.
Observers said the agreement was significant as prices are rising and countries and regions worldwide jockey to sign pacts and nail down LNG from gas-rich nations. China, for example, recently surprised the market by snapping up supply deals.
German Chancellor Olaf Scholz described the negotiations with Qatar as “tough”.
Locked in for a decade and a half
One point of contention was the length of the contracts. German Economics and Energy Minister Robert Habeck, a Green party member, had initially pushed for shorter running times of no more than 10 years to avoid conflict with the coalition government’s pledge to switch almost entirely to renewable energy by 2045, while Qatar had insisted on 20-year agreements.
In announcing the 15-year arrangement, Habeck stressed that the duration of the deal was negotiated by private gas importers and said participants “must realise” that Germany’s offtake could shrink as the share of renewables in its energy mix expands.
The announcement of the supply plans during the 2022 football World Cup in Qatar added an especially poignant note, especially as Germany had repeatedly criticised human rights abuse in the Middle East state, and one of Scholz’s cabinet members demonstrably wore the controversial “One Love” armband during the matches.
The Qatari energy minister said his country was “separating politics from business.”
Observers were unsure who would initially benefit from Germany’s first major gas deal, which is believed to cover only 3-6% of the amount needed to make up for the shortfall of expected natural gas supplies from the now defunct Nord Stream Russian pipelines, with many wanting to wait until additional deals are sealed. Germany is also talking to the United Arab Emirates about LNG.
Market research group GlobalData (London; www.globaldata.com) recently predicted that Germany will register the highest LNG regasification additions in Europe between 2022 and 2026 (see Plasteurope.com of 18.11.2022).
In announcing the 15-year arrangement, Habeck stressed that the duration of the deal was negotiated by private gas importers and said participants “must realise” that Germany’s offtake could shrink as the share of renewables in its energy mix expands.
The announcement of the supply plans during the 2022 football World Cup in Qatar added an especially poignant note, especially as Germany had repeatedly criticised human rights abuse in the Middle East state, and one of Scholz’s cabinet members demonstrably wore the controversial “One Love” armband during the matches.
The Qatari energy minister said his country was “separating politics from business.”
Observers were unsure who would initially benefit from Germany’s first major gas deal, which is believed to cover only 3-6% of the amount needed to make up for the shortfall of expected natural gas supplies from the now defunct Nord Stream Russian pipelines, with many wanting to wait until additional deals are sealed. Germany is also talking to the United Arab Emirates about LNG.
Market research group GlobalData (London; www.globaldata.com) recently predicted that Germany will register the highest LNG regasification additions in Europe between 2022 and 2026 (see Plasteurope.com of 18.11.2022).
05.12.2022 Plasteurope.com [251676-0]
Published on 05.12.2022