Germany to Receive Additional Qatari LNG Shipments from 2026
- November 30, 2022
- Posted by: Quatro Strategies
- Category: Energy
Germany is set to receive additional volumes of Qatari LNG from 2026 as part of two sales and purchase agreements between QatarEnergy and ConocoPhillips. With these deals, Germany has managed to cover its export for at least 15 years. Competition for LNG has become intense since Russia invaded Ukraine in February. Europe joined Asia’s big importers of LNG to replace the Russian pipeline gas, which used to make up 40% of its imports. The deal, the first of its kind to Europe from Qatar’s North Field expansion project, will provide Germany with 2 million tonnes of LNG annually.
“(The agreements) mark the first ever long-term LNG supply agreement to Germany, with a supply period that extends for at least 15 years, thus contributing to Germany’s long-term energy security,” Qatar’s minister of energy and QatarEnergy CEO Kaabi said in a joint news conference with ConocoPhillips CEO Lance.
A subsidiary of ConocoPhillips will purchase the agreed to quantities to be delivered to the German receiving terminal, which is currently under development.
QatarEnergy and German utility firms have been in talks on long-term LNG deals for much of this year as Berlin looks for alternatives to Russia, which is Germany’s biggest gas supplier.
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.
Germany, Europe’s biggest gas importer, will need 40 million tonnes of LNG to replace 50 billion cubic meters (bcm) of pipeline gas it used to receive from Moscow. Its gas consumption in 2021 was around 88 bcm.
The country’s consumption is expected drop to 73 bcm by 2027, so this deal could cover around 3.7% of that.
Still, some analysts think 2026 is late and Germany needs LNG for 2023 and 2024, in order to secure sufficient volumes and avoid exposure to spot prices.
Kaabi said negotiations were still taking place with other German companies for further supply.
QatarEnergy signed a 27-year sales and purchase agreement with China’s Sinopec a few days ago. The North Field is part of the world’s biggest gas field, which Qatar shares with Iran.
QatarEnergy earlier this year signed five deals for North Field East (NFE), the first and larger of the two-phase North Field expansion plan, which includes six LNG trains that will ramp up Qatar’s liquefaction capacity to 126 million tonnes per year by 2027 from 77 million.
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