Arne Delfs, Michael Nienaber, and Verity Ratcliffe, Bloomberg News
BERLIN/DUBAI
EnergiesNet.com 05 20 2022
Germany’s efforts to secure more natural gas from Qatar yielded only modest results, with the Persian Gulf energy giant unable to offer any extra flows for another two years as output is already at full tilt.
Qatar said liquefied natural gas could be sent to Germany from a new US plant it has a stake in, from 2024. An expansion project at home won’t begin operations until at least 2026, later than expected.
Europe is racing to find alternatives to gas from Russia — the continent’s biggest supplier — after the country’s invasion of Ukraine. Imports of LNG from Qatar and the US, the world’s largest exporters, are a key part of that solution.
“Whatever we can provide for energy security in Europe, even during this period, we will make sure that we can provide,” Qatar’s emir, Sheikh Tamim bin Hamad Al Thani, told reporters at a press conference in Berlin, where he met with government officials.
The emir and German Economy Minister Robert Habeck signed a joint declaration of intent on Friday, agreeing to broadly work together on energy. Berlin and Doha are currently negotiating a long-term supply deal for LNG from Qatar.
However, since Qatar is already producing well above its output capacity and has repeatedly said it won’t break contracts with buyers in Asia, it has few options to help Germany meet its goal of eliminating Russian gas imports by 2024. While Germany has already cut its dependency, Russia still supplies 35% of its gas imports.
Golden Pass
Qatar has suggested offering shipments from Golden Pass, a new liquefaction plant owned by Qatar Energy and Exxon Mobil Corp., as a more-immediate source of gas.
“We aim to have our LNG plant Golden Pass in Texas, 70% of which are owned by Qatar Energy, ready by 2024 so that we can deliver to Germany,” Deputy Premier Sheikh Mohammed bin Abdulrahman Al Thani told Handelsblatt newspaper.
But there have been differences between the two sides on the terms, a person familiar with the discussions said. German companies are reluctant to commit to buy LNG over 20 years or more because of the country’s goal of cutting carbon emissions by 88% by 2040, said the person.
To solve the problem, Germany has floated the idea that Qatar could auction rights for agreements of varying durations, the person said. This could allow German companies to bid for shorter-term contracts while importers from elsewhere could bid for longer contracts.
Qatar Energy didn’t immediately respond to a request for comment on the discussions. Qatar typically negotiates long-term supply agreements with buyers on a bilateral basis.
At Friday’s press conference, German Chancellor Olaf Scholz hinted that Qatar would be ready to loosen its strict destination clauses, which prevent Berlin from rerouting Qatari gas from German import terminals to other locations in Europe.
“There are several countries in Europe that don’t have access to the coastline and would like to diversify their gas supply via the northern German ports — and here Qatar is playing a good role,” Scholz said.
He added that both sides recognize the Golden Pass project would have a cross-border dimension in Europe.
Scholz has vowed to help Eastern European countries, such as the Czech Republic and Slovakia, which depend on Russian gas but don’t have ports. Germany has expedited plans it previously shelved to construct two LNG import terminals at Brunsbuttel and Wilhelmshaven.
bloomberg.com 05 20 2022
