United Arab Emirates to supply Germany with gas, diesel

The United Arab Emirates agreed Sunday an "energy security" agreement with Germany to supply liquefied natural gas and diesel as Berlin searches for new power sources to replace Russian supplies.

United Arab Emirates to supply Germany with gas, diesel
German Chancellor Olaf Scholz (L) and UAE Minister of Climate Change and Environment Mariam Almheiri tour the Jubail Mangrove Park in Abu Dhabi on September 25, 2022. Photo: Mohamad Ali Harissi/AFP)

Emirati industry minister Sultan Ahmed Al Jaber called it a “landmark new agreement” that “reinforces the rapidly growing energy partnership between the UAE and Germany” as he signed the deal, which was witnessed by Chancellor Olaf Scholz, the UAE’s state news agency WAM reported.

Scholz is on a visit to the UAE, where he met with Emirati President Sheikh Mohamed bin Zayed Al-Nahyan.

Scholz said he “welcomed” the “energy security” agreement, WAM added.

As part of the deal, the UAE will provide “an LNG cargo for delivery in late 2022, to be used in the commissioning of Germany’s floating LNG import terminal at Brunsbuettel”, a North Sea port, the statement added.

UAE state oil company ADNOC completed its first ever direct diesel delivery to Germany earlier this month, and will “supply up to 250,000 tons of diesel per month in 2023”, it said.

The German leader is touring the Gulf in the hope of sealing new energy deals to replace Russian supplies and mitigate the energy crisis resulting from Moscow’s invasion of Ukraine.

On Saturday, Scholz met in Jeddah with Saudi Crown Prince Mohammed bin Salman, and later Sunday he was due to fly to gas-rich Qatar to hold talks with Emir Sheikh Tamim bin Hamad Al-Thani.

Energy transition

Scholz’s stop in the UAE included a tour of an environmental project at a mangrove park with Emirati climate change minister Mariam Almheiri.

Almheiri said discussions on Sunday would, in addition to energy security, cover “climate action and economic growth”.

“The UAE believes all three pillars must go hand and hand. We cannot look at one or two of these pillars separately,” she said.

She also reiterated Abu Dhabi’s insistence on “a just transition” away from fossil fuels.

Both the UAE and Saudi Arabia have been leading critics of what they describe as “unrealistic” transition models they say have contributed to the current energy crunch.

Scholz told reporters in Abu Dhabi that his country had “made progress on a whole series of projects here in terms of the production and purchase of diesel and gas”, while adding it was determined to avoid energy dependence on Russia in the future.

“The fact that we are dependent on one supplier and also dependent on its decisions will certainly not happen to us again,” he said.

“With the investments that we are now making in Germany, and that will become reality bit by bit next year, we will indeed have an infrastructure for gas imports for Germany, such that we are no longer directly dependent on the specific supplier at the other end of the pipeline, as we are with a pipeline connection.”

His visit to Qatar comes one day after France’s TotalEnergies signed a new $1.5 billion deal to help expand Doha’s natural gas production. Scholz said such projects were “important”.

“We have to ensure that the production of liquefied gas in the world is advanced to such an extent that the high demand that exists can be met — without having to fall back on the production capacities in Russia that have been used so far,” he said.

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‘Over half’ of Germans heating homes less or not at all

High energy costs are changing the heating habits of people in Germany. According to a recent survey, one in ten people didn't turn on their heating or oven at all in September, October or November this year.

'Over half' of Germans heating homes less or not at all

The Ukraine conflict and the economic sanctions against Russia have been driving up the prices of natural gas and oil for months and causing energy costs in Germany to rise rapidly.

As well as introducing several financial relief packages to help people struggling with rising energy costs, the German government has been encouraging people to use energy in their homes more sparingly. 

A recent study conducted by the opinion research institute YouGov on behalf of the news agency DPA seems to show that many consumers are heeding the government’s call to save energy, and that the situation is having an impact on the way that people in Germany use heating in their homes. 

READ ALSO: German households to receive relief for gas costs ‘starting in January’

According to the survey, ten percent of respondents had gone without heating their homes in the current autumn season and had still not turned on their stove or heating by the end of November, despite wintry temperatures and snow in some areas of the country.

Over the winter months, rented properties in Germany have what’s known as a Heizperiode meaning “heating period”, which is usually from October 1st to April 30th. Normally, tenants in Germany are obliged to keep their homes heated to a minimum level to prevent mold and disrepair.

But Germany’s Energy Saving Ordinance, which was brought into force this year as a result of the energy crisis, means that from September 2022, minimum temperatures in rental agreements no longer apply and tenants are allowed to heat less if they want to save on their energy costs.

READ ALSO: EXPLAINED: When should I turn on my heating in Germany this year?

The vast majority (90 percent) of respondents to the survey said they had already used the stove or heating system by the end of November – but had noticeably changed their heating behaviour: 68 percent are heating less than in the same period last year, while around half are heating significantly less.

More than one in two (56 percent), on the other hand, turn down the central heating to save money. Twenty percent heat less because of higher outside temperatures, and 15 percent want to contribute to the security of energy supply by reducing the amount they heat their homes. 

Financial benefits from energy saving

Those who save energy in Germany will also be rewarded by some of the coalition government’s forthcoming relief measures.

The state will cover gas bills for households and small businesses for December and the amount of relief people will get will be based on previous usage, rather than actual usage.

READ ALSO: EXPLAINED: How Germany plans to pay people’s gas bills in December

If people reduce their consumption by 20 percent, for example, they’ll not only get their monthly payment waived but will also receive deductions on future bills as well, or a credit from their gas provider. 

Energy savers will also benefit from the electricity and gas price brake due to come into force in March 2023. The price will be capped for 80 percent of consumption, while the normal market price will be payable for the remaining 20 percent. Therefore those who save energy will benefit.