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Qatar approves long-term gas supply deal with Germany: Energy Minister

  • By Al Mayadeen English
  • Source: Agencies
  • 29 Nov 2022 15:19
  • 2 Shares
3 Min Read

Qatar will supply Germany with gas for at least 15 years from its North Field East and South projects from 2026.

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  • QatarEnergy CEO and Minister of Energy, Saad Al- Kaabi with ConocoPhillips CEO, Ryan Lance (Reuters)
    QatarEnergy CEO and Minister of Energy, Saad Al-Kaabi, with ConocoPhillips CEO, Ryan Lance (Reuters)

Qatar has agreed to send Germany two million tons of liquefied natural gas (LNG) a year for at least 15 years, officials announced on Tuesday, as the European country struggles for alternative supplies amid the Ukraine war.

Since the start of the war in February, competition for LNG has become intense, with Europe needing huge amounts to help replace Russian pipeline gas that previously made up almost 40% of the continent's imports.

Germany, Europe's biggest economy, which mainly relies on natural gas to power its industry, aims to replace all Russian energy imports by as soon as mid-2024.

Saad Sherida Al-Kaabi, Qatar's Energy Minister and CEO of QatarEnergy, indicated that with the long-awaited deal, Qatar aims to "contribute to efforts to support energy security in Germany and Europe."

According to Al-Kaabi, QatarEnergy's partner, US firm ConocoPhillips, will supply the gas from Qatar's North Field East and South projects from 2026 to the Brunsbuttel LNG terminal being developed in northern Germany.

Asian countries led by China, Japan, and South Korea are the main market for Qatar's gas, which has been increasingly sought by European countries since the start of the Ukraine war.

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On his part, German Economy Minister Robert Habeck said the 15-year term of the deal was "great".

But the head of energy analytics, Andreas Schroeder, considered that the starting date of 2026 was late, as Germany needed LNG for 2023 and 2024.

"If German players do not secure sufficient volumes at an OK price for 2023, they will have to revert to spot LNG markets, and expose themselves to global price volatility," he pointed out.

The deal with Germany was struck a week after QatarEnergy announced a 27-year agreement to ship four million tons a year to China, saying it was the longest ever seen in the industry.

According to the deal, the Gulf country would supply the China Petroleum and Chemical Corporation (Sinopec) with 4 million tonnes of LNG (Liquefied Natural Gas) annually from its newly established North Field East (NFE) LNG project.

In addition to the supply deal, the CEO of Sinopec also stated that he submitted a request to acquire a share in the Qatari LNG project, where Western energy companies have had the biggest share until today.

Read more: Shell buys 9% stake in Qatari gas field

  • LNG
  • Europe
  • Germany
  • Qatar

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