GERMANY is gambling on Qatari gas supplies to meet its energy needs as it shifts from pipelined Russian gas.
The country has secured liquefied natural gas (LNG) from a new mega-deal between Conocophillips and Qatarenergy.
Germany will enjoy a hefty supply boost from 2026, after Qatarenergy and Conocophillips agreed two new sales and purchasing agreements yesterday, covering a 15-year period.
A Conocophillips subsidiary will purchase the agreed quantities to be delivered to the German receiving terminal in Brunsbuettel, which is currently under development.
It is the first deal of its kind to Europe from Qatar's North Field expansion project, and will provide Germany with 2m tonnes of LNG annually.
Since Russia's invasion of Ukraine in February, global competition for LNG has intensified with sanctions and policy changes causing the West to pivot from Kremlin-backed fossil fuels.
Germany used to rely on Russia for over half its gas needs and 40 per cent of its oil demand - but has pivoted to LNG, coal and Norwegian gas supplies to meet its needs, alongside nationwide energy rationing policies.
It aims to replace all Russian energy imports as soon as mid-2024.
Europe's biggest economy has mainly relied on natural gas to power its industry, with the German government forced to bail out utility giant Uniper amid soaring wholesale gas prices.
The cost of nationalising the firm has risen to over €50bn, with the company reporting one of the worst loss-making periods in the history of business, recording €40bn in net losses over nine months of trading this year.
Germany's shift from Russian gas reflects Europe's general move away from Kremlin-backed supplies REPOWEREU is the European Commission's plan to make Europe independent from Russian fossil fuels well before the end of the decade.
The EU is currently looking to finalise oil and gas price caps, with the bloc holding extensive talks over pricing in recent weeks as it looks to slash Russian war revenues and ease the cost of living crisis.
It has topped up supplies to nearly 95 per cent of capacity ahead of winter, which has seen wholesale costs ease and reduced fears of blackouts this winter.
(c) 2022 City A.M., source Newspaper