Germany in Talks With Qatar for LNG Supplies

Copyright © 2022 Energy Intelligence Group All rights reserved. Unauthorized access or electronic forwarding, even for internal use, is prohibited.

Germany and Qatar have agreed to start talks for LNG to supply Europe's largest gas market, and its new LNG import terminals, following a state visit by the German economy and climate minister to Doha.

Robert Habeck “held open talks” with the Qatari government to pave the way to supplying gas to Europe, which Doha has committed to do, a spokeswoman from the German ministry told Energy Intelligence.

“Now German companies will enter into negotiations with Qatari companies,” she said.

Germany is Europe’s largest buyer of Russian gas, which makes up over half of the country’s gas imports. Germany has no domestic LNG terminals as yet, but German companies can buy LNG to be shipped into terminals in Northwest Europe. The gas can then be transported via pipe to Germany.

The country is scrambling to diversify away from Russian gas imports in the wake of Russia’s invasion of Ukraine by rubber-stamping two LNG import terminals, creating a strategic gas reserve and accelerating renewable power capacity.

Nothing Definitive

QatarEnergy said in a statement it had been discussing the supply of Qatari LNG to Germany “for a number of years” but it did not materialize into definitive deals due to the uncertainty over the long-term role of gas and the needed LNG import terminals.

In a meeting on Sunday with Energy Minister and QatarEnergy CEO Saad al-Kaabi, Habeck told Doha that Berlin is fast-tracking two German LNG import terminals.

Based on this, “the two sides agreed that their respective commercial entities would re-engage and progress discussions on long-term LNG supplies from Qatar to Germany,” the company said.

German utility RWE did not comment on the Qatari agreement and fellow utility Uniper did not respond to questions. The companies are spearheading the country’s first two LNG import terminals.

Qatar’s short-term LNG cargo availability is limited to help Europe’s supply shortage as most of its cargoes are mostly locked into long-term contracts with Asian customers. New Qatari capacity will come on line by 2025 when the first phase of its megaexpansion project is planned.

German LNG Terminal Plans

Any potential long-term deal with Qatar will likely not influence Germany’s short-term plans to reduce Russian gas imports this year. The German terminals will take at least two years to build at the earliest — and that’s only with a sped-up permitting procedure.

RWE CEO Markus Krebber said recently that the bottleneck to build Brunsbuttel was the onshore infrastructure, but he was optimistic the project could be built before 2025.

Berlin is supporting the 8 billion cubic meter per year Brunsbuttel LNG terminal project by buying half of its shares through state bank KfW. The remaining shareholders are gas infrastructure company Gasunie and RWE.

The utility said on Monday that Brunsbuttel will also have an ammonia import terminal component to import around 300,000 tons of green ammonia per year from 2026.

Uniper recently resumed work on developing the 10 Bcm/yr Wilhelmshaven floating LNG terminal based on the government’s new gas import diversification plans.

The project company for a third planned project, the 12 Bcm/yr Stade LNG import terminal, said on Monday it was seeking nonbinding commercial interest to book long-term capacity from 2026 in the project between Mar. 21 to Apr. 8, 2022. The project is being spearheaded by Belgian gas infrastructure company Fluxys.

German-UAE Hydrogen Deal

As part of his trip through the Middle East, Habeck then traveled to the United Arab Emirates, where he oversaw the signing of four cooperation projects to develop and supply green hydrogen to Germany.

These include a joint hydrogen transportation study between Uniper, Jera and Germany’s Hydrogenious together with Abu Dhabi National Oil Co. (Adnoc).

RWE also signed a memorandum of understanding with Adnoc to collaborate in green hydrogen and hydrogen derivatives such as ammonia, including to explore the potential to transport it to Germany. This includes the first low carbon “blue” ammonia test cargoes to be shipped from the UAE to Germany this year.

Adnoc also signed similar deals with German copper producer Aurubis, energy service provider GETEC and power company Steag.

LNG Supply, Floating LNG, LNG Projects, LNG Contracts, Gas Supply, Gas Demand
Market players seek clarity following the French president's comments on how much spare production capacity is available in Gulf states.
Tue, Jun 28, 2022
We see Eni's postponement of its Plenitude IPO as a sign that Western energy firms are once again struggling to tap equity markets.
Tue, Jun 28, 2022
The Coral South floating LNG project offshore Mozambique is preparing for start-up but the outlook for further liquefaction schemes is hazy.
Tue, Jun 28, 2022