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UKRAINE

Germany releases billions to move away from Russian gas

Germany has released nearly three billion euros ($3.2 billion) to acquire floating liquefied natural gas import terminals, the finance ministry said Friday, as it seeks to move away from dependence on Russian gas.

logo of Russian Gazprom's German subsidiary
A photo taken on April 5, 2022 shows the logo of Russian gas giant Gazprom's German subsidiary Gazprom Germania on their headquarters in Berlin, Germany. John MACDOUGALL / AFP

“Dependence on Russian energy imports must be reduced quickly and sustainably,” tweeted Finance Minister Christian Lindner.

“Floating LNG terminals make an important contribution to this, for which we must provide funding,” he added.

A total of 2.94 billion euros has been made available for the lease of these huge LNG carriers, the finance ministry told AFP.

Europe, and Germany in particular, is counting on LNG to reduce its dependence on Russian imports after Moscow’s invasion of Ukraine.

Some 20 countries export this liquefied gas which is transported by ship, and whose three largest suppliers are Australia, Qatar and the United States.

Liquefied to take up less space, the LNG is regasified on arrival for distribution.

The mobile terminals, known as Floating Storage Regasification Units (FSRU), allow for converting LNG carried by a tanker into gas and injecting it into the pipeline network.

Last week European countries announced expanded efforts to wean themselves off Russian gas.

Russia is a major fossil fuel producer and accounted for around 45 percent of the European Union’s gas imports last year, but the bloc is under pressure to impose sanctions on oil and gas imports from Moscow.

In recent years, Germany has imported an average of 55 percent of its gas from Russia via onshore pipelines.

This share was reduced to 40 percent by the end of the first quarter of 2022, in favour of higher imports from the Netherlands, Norway and of LNG, according to the economy ministry.

Unlike several European countries, however, Germany does not have an onshore terminal to process imported liquefied gas.

For the time being, it relies on terminals in other EU countries, which limits its import capacity.

According to German media reports, the government is considering, in conjunction with private partners, the rental of three or four ships that would be positioned in North Sea or Baltic ports for this purpose.

Some of these facilities could be in operation by next winter.

The government does not consider it realistic to be able to do without Russian gas before mid-2024.

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ENERGY

Qatar agrees to ‘long-term gas supply’ deal with Germany

Qatar has agreed to send Germany two million tons of liquefied natural gas a year for at least 15 years, officials said Tuesday, as Europe's biggest economy scrambles for alternative supplies after Russia's invasion of Ukraine.

Qatar agrees to 'long-term gas supply' deal with Germany

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

Kaabi, who is also QatarEnergy’s chief executive, said so many European and Asian countries now want natural gas that he did not have enough negotiators to cope.

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

Russia’s invasion of Ukraine in February increased pressure on the German government to find new sources. And the latest deal will not help the country get through the looming winter.

The gas will be bought through US firm ConocoPhillips, a long-term partner with QatarEnergy, and sent to a new terminal that Germany is hurrying to finish at Brunsbuttel.

“We are committed to contribute to the energy security of Germany and Europe at large,” Kaabi told a press conference after the signing ceremony with ConocoPhillips chief executive Ryan Lance.

Lance hailed the accord as “a vital contribution to world energy security”.

READ ALSO: EXPLAINED: What are Germany’s alternatives to Russian gas?

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

Qatari officials would not discuss prices but industry analysts have said Germany will have to pay a premium for the shorter contract and the hurried start to deliveries.

Intense demand

Kaabi again stressed the “sizeable investments” that 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 sent.

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 biggest natural gas reserves and extends under the Gulf into Iranian territory.

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

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 threw supplies into doubt.

“There is very intense discussions with European buyers and with Asian buyers,” Kaabi said, highlighting the “scarcity of gas coming in the next few years”.

“We do not have enough teams to work with everybody, to cater for the needs” of all countries making demands.

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

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

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

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

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