QATAR AND GERMANY SIGN 15-YEAR NATURAL GAS CONTRACT

12/05/2022

Last Tuesday, Germany signed a contract to buy two million tons of liquefied natural gas (LNG) from Qatar annually for 15 years. Companies Qatar Energy and ConocoPhillips will send gas from the Persian Gulf to the LNG terminal in Brunsbüttel starting in 2026 (The Guardian). 

The agreement comes as Germany continues efforts to secure energy supplies after Russia stopped supplying it with gas in August (AP News). Prior to the Ukraine war, Russian supplied roughly 500 terawatt hours (TWh) of gas to Germany each year (Bloomberg). Since Russia stopped its gas flows to the European Union, Germany has turned to several other countries, including Norway, the Netherlands, and Belgium, for gas in its move to secure future energy supply (AP News). The two million tons of LNG that Germany will receive from Qatar each year equates to about 30 TWh, 3% of Germany’s yearly energy consumption and about 6% of the amount of gas Russia imported to Germany in 2021 (Bloomberg). 

The agreement has sent mixed signals over the priority Germany places on its commitment to a carbon-neutral energy supply. On the one hand, it locks Germany into another 15 years of fossil fuel usage (The Guardian). On the other hand, the contract with Qatar is over a relatively small volume, and is due to end in 2041, four years before Germany’s carbon neutrality target (Bloomberg).