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Qatar signs gas export deal with Germany

November 29, 2022

The deal struck with QatarEnergy is set to go into effect in 2026 and last 15 years. Berlin is seeking to replace Russian gas, which used to cover over one half of Germany's annual supply.

QatarEnergy workers in Ras Laffan control center overlooking ship
Qatar has agreed to ship 2 million tons of LNG a year to Germany starting in 2026Image: Karim Jaafar/AFP/Getty Images

Qatar's state-owned oil and gas company has agreed to send Germany two million tons of liquefied natural gas (LNG) a year, QatarEnergy's CEO said on Tuesday.

Talks have taken several months, with Germany resisting the type of long-term contracts that Qatar normally demands to justify investment in the industry.

Germany consumes around 100 billion cubic meters of natural gas annually, a little over half of which had been coming from Russia. The deal struck with QatarEnergy covers around 2.7 billion cubic meters per year.

Qatar aims to "contribute to efforts to support energy security in Germany and Europe", Energy Minister and QatarEnergy CEO Saad Sherida al-Kaabi said.

"Germany represents the largest gas market in Europe ... and we are committed to support its energy security," Saad al-Kaabi said.

Commenting on the new deal, German Chancellor Olaf Scholz described it on Tuesday as a "building block" toward his country's energy security. Scholz said the deal also signaled Berlin's diverse options for energy supplies.

What do we know about the deal?

The gas will arrive from Ras Laffan in Qatar to Germany's LNG terminal of Brunsbüttel in the northern state of Schleswig-Holstein.

Gas will be sold to the US company Conoco Phillips, which will deliver it to Germany. Supply is set to begin in 2026, and will continue for at least 15 years.

China, Japan and South Korea are currently the main market for Qatar's gas. Last week, Doha struck a 27-year agreement to ship four million tons of LNG a year to China.

German Economy Minister Robert Habeck said that although Berlin would have nothing against signing a deal that lasts 20 years or more, companies have to be "aware of Germany's long-term climate goals."

Germany must cut its gas consumption from the mid-2030s if it wants to meet its ambitious goal, he said, pointing out that the country aims to become carbon neutral by 2045.

Why is Germany importing Qatari gas?

Moscow has slashed gas supplies to European countries over their support for Kyiv following Russia's invasion of Ukraine. Germany, once a major importer, hasn't received any Russian gas since August.

The country is building five LNG terminals in order to replace Russian supplies.

Currently, much of Germany's gas supply comes from or via Norway, the Netherlands and Belgium.

Berlin has also temporarily reactivated old oil- and coal-fired power stations and extended the life of the country's last three nuclear power plants.

sdi/dj (Reuters, AP, AFP, dpa)

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