Qatar to supply Germany with LNG under long-term gas deal

LNG tanker Source: iStock

Qatar has agreed to supply Germany with liquefied natural gas under a long-term deal that will go a small way to helping the European country replace piped flows from Russia.

State-owned Qatar Energy and ConocoPhillips have signed agreements that will see the Persian Gulf state send up to 2 million tons of LNG a year to Germany from 2026. The deals will last at least 15 years, Qatar’s energy minister, Saad al Kaabi, told reporters in Doha alongside Ryan Lance, ConocoPhillips’ chief executive offer.

Germany has had to retool its energy policy since the war in Ukraine forced it to end its long-standing dependence on cheap Russian gas. German politicians have been scouring the globe for alternative supplies to keep its industry alive and households warm, while also racing to build new infrastructure to handle LNG. 

The deal with Qatar equates to about 6 per cent of the volumes of Russian gas Germany imported in 2021. But signing an agreement is a significant step, particularly as the global LNG market is increasingly competitive, with Europe fighting over cargoes with Asia.

It’s also a sign that Berlin may be softening its opposition to longer contracts of as much as 25 years, which risks running counter to its goal to be climate-neutral by 2045.

“I also wouldn’t be opposed to 20-year or even longer contracts,” Robert Habeck, Germany’s economy minister said at an industry conference on Tuesday. “The companies should just be aware that the buying side in Germany will become smaller, if we want to keep the climate goals.”

Qatar is continuing to talk to German buyers about additional supplies, Qatar’s energy minister, Saad al Kaabi said. He previously said Qatar is in talks with Germany’s RWE and Uniper SE about long-term LNG contracts.

The gas will come from ConocoPhillips’ joint ventures in Qatar and will be delivered to the Brunsbuttel floating import terminal that’s under construction.

The five import facilities chartered by the German government will cost a total of €6.5 billion ($6.7 billion) over the next 10 to 15 years. There is also one privately chartered terminal planned. Once operational, they will be able to cover around one third of Germany’s current gas demand, according to a government estimate.

© 2022 Bloomberg L.P.

Dear user, please be aware that we use cookies to help users navigate our website content and to help us understand how we can improve the user experience. If you have ideas for how we can improve our services, we’d love to hear from you. Click here to email us. By continuing to browse you agree to our use of cookies. Please see our Privacy & Cookie Usage Policy to learn more.