Qatar announces first major gas deal for Germany – Digital Journal

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Qatar’s Energy Minister Saad Sherida al-Kaabi says up to two million tons of liquefied natural gas a year will be shipped to Germany from 2026 as Europe strives to find alternatives to Russian energy sources – Copyright AFP Hector RETAMAL

tim witcher

Qatar announced its first major deal on Tuesday to send liquefied natural gas to Germany as Europe struggles to find alternatives to Russian energy sources.

Qatar’s Energy Minister Saad Sherida al-Kaabi said up to two million tons of gas would be shipped a year for at least 15 years from 2026, and that state-owned QatarEnergy was discussing other potential deals for the economy. big in Europe.

Kaabi, who is also chief executive of QatarEnergy, said so many European and Asian countries now want natural gas that it did not have enough negotiators to deal with it.

Talks for the latest deal took several months as Germany has resisted the long-term contracts that Qatar normally requires to justify its massive investment in the industry.

The Russian invasion of the Ukraine in February increased the pressure on the German government to find new sources. And the latest deal won’t help the country get through the coming winter.

The gas will be purchased through US firm ConocoPhillips, a long-term partner of QatarEnergy, and sent to a new terminal Germany is rushing to finish at Brunsbuttel.

“We are committed to contributing to the energy security of Germany and Europe in general,” Kaabi said at a news conference after the signing ceremony with ConocoPhillips CEO Ryan Lance.

Lance hailed the deal as “a vital contribution to global energy security.”

Qatar announced a 27-year deal last week to ship four million tons a year to China. He said this was the longest agreed contract in the industry.

Qatari officials did not discuss pricing, but industry analysts have said Germany will have to pay a premium for the shorter contract and rushed start of deliveries.

– Intense demand –

Kaabi re-emphasized the “significant investments” his country has made in extracting gas for deliveries around the world.

But he also said that Qatar was negotiating with German companies to further increase the “volumes” being shipped.

The gas will come from the North Field East and North Field South projects that Qatar is developing with ConocoPhillips and other energy multinationals. North Field contains the world’s largest natural gas reserves and extends under the Gulf into Iranian territory.

Through the expansion at North Field, Qatar aims to increase its production by 60 percent by 2027. With increases in international prices, the value of its exports has nearly doubled in the past year, state media recently said.

Asian countries led by China, Japan and South Korea have been the main market for Qatar’s gas, but it has been increasingly targeted by European countries since Russia’s war on Ukraine put supplies in doubt.

“There are very intense discussions with European buyers and with Asian buyers,” Kaabi said, noting the “gas shortage that is coming in the next few years”.

“We do not have enough teams to work with everyone, to meet the needs” of all the countries that demand.

Kaabi said the deal with China’s Sinopec showed that “Asian buyers feel pressure to want to secure long-term deals… I think we’re in a good position.”

The Brunsbuttel terminal serves customers of German energy companies Uniper and RWE, and Economy and Energy Minister Robert Habeck said the two companies “have to buy on the world market.

“It is clear that the world market has different suppliers, and it is smart for companies to buy the most favorable offers for consumers in the world market, and that includes Qatar.

“But this is not the only provider on the market.”

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