Qatar Inks 15-Year Gas Deal With Germany

Improve the News Foundation -

Facts

  • On Tuesday, state-owned QatarEnergy and the US company ConocoPhillips signed two sales and purchase agreements to supply liquefied natural gas (LNG) to Germany for 15 years starting in 2026. It's the first deal to Europe from Qatar's North Field expansion project.
  • According to Qatar’s energy minister, the Persian Gulf state will annually sell 2M metric tons of LNG to ConocoPhillips, which will then deliver it to Germany's northern LNG terminal in Brunsbüttel. Germany is currently building four temporary floating LNG emergency terminals while plans for permanent terminals progress.
  • The deal comes as Germany seeks alternatives to Russian gas supplies as the Ukraine war continues. Berlin would require about 40M metric tons of LNG to offset past Russian supplies of 50B cubic meters of pipeline gas. In 2021, Germany's demand was about 88B cubic meters.
  • Since Germany sided with Ukraine after Russia's invasion in February, Moscow has slashed and then cut off supplies of natural gas to Germany — triggering a severe energy crisis that's fueling inflation. Germany now covers much of its gas needs through supplies from or via Norway, the Netherlands, and Belgium.
  • After signing a 27-year purchase agreement with China's Sinopec just days before the Qatari-German deal, QatarEnergy CEO Saad al-Kaabi said Tuesday that negotiations were underway with other German companies for additional supplies. The North Field is part of the world's largest gas field and is jointly shared between Qatar and Iran.
  • Following the agreement, German Economy Minister Robert Habeck said he wouldn't have objected to a contract term "of 20 [years] or longer..." However, this would run counter to Germany's plan to become carbon neutral by 2045 — requiring Germany to reduce its gas consumption starting from the mid-2030s.

Sources: Reuters, Guardian, ABC, Euro, and Al Jazeera.

Narratives

  • Pro-establishment narrative, as provided by Politico. With the war in Ukraine escalating, Germany is scrambling to find alternatives to Russian gas. For example, Berlin is working on a solidarity agreement with Italy that could include gas sharing. In addition, it has signed agreements on gas deliveries with Austria and Denmark. Forging ties with big exporters is necessary to diversify its supplies as quickly as possible. While it may not prevent a short-term energy crunch, the 15-year deal with Qatar is crucial to Germany’s long-term energy security.
  • Establishment-critical narrative, as provided by The Guardian. Germany — ironically a blatant critic of Qatar's hosting of the 2022 soccer World Cup due to its violation of human rights and its treatment of the LGBTQ community — has silenced its voice by prioritizing business over values. Moreover, the short-term agreement underlines the European economic powerhouse's commitment to reaching carbon neutrality by 2045. The urge to shake hands with Qatar is beyond comprehension.

Predictions