Putin Free Gas – Germany to buy expensive LNG from Qatar

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Joseph P Chacko
Joseph P Chacko
Joseph P. Chacko is the publisher of Frontier India. He holds an M.B.A in International Business. Books: Author: Foxtrot to Arihant: The Story of Indian Navy's Submarine Arm; Co Author : Warring Navies - India and Pakistan. *views are Personal

On Sunday, Germany reached a deal to source liquefied natural gas from Qatar, with Europe’s largest economy seeking to replace some of its current gas needs from Russia, the German government said in a Twitter post. 

The news comes after German Vice Chancellor, Minister for Economic Affairs and Climate Protection Robert Habeck visited Qatar this weekend.

Habeck said Qatar is also open to more co-operation and investment in renewable energy projects.

“The good news is that liquefied natural gas from Qatar will be provided to Germany,” Habeck said in a video on Twitter. “Now companies have to sign contracts,” he added.

“Qatar is in the process of increasing gas production, and we need more gas in the short term to replace Russian supplies. I discussed this with the emir and the energy minister of Qatar,” said the German economy minister.

According to Robert Habeck, the German companies accompanying the delegation to Qatar will now hold detailed negotiations with the Qatari side on concluding contracts. The minister refused to disclose the volume of gas from Qatar.

Qatar is one of the world’s largest suppliers of liquefied natural gas (LNG). Before leaving for a visit to Doha, Habeck said that the visit was about securing short-term and long-term gas supplies from Qatar. The minister announced his intention to speed up the construction of terminals in Germany for receiving LNG.

According to Habeck, the agreed partnership with Qatar includes LNG supplies to Germany and renewable energy sources and energy efficiency measures. German firms have a lot to offer in these areas, DPA reports.

Insurance against Russian supply stoppage

Although liquefied natural gas is more expensive than Russia’s pipeline, the LNG terminals that have yet to be built should be a kind of insurance for Germany’s stable energy supply if Russia stops exporting.

Habeck clarified that the new partnership does not replace Germany’s dependence on Russia with dependence on Qatar. “We need diversification, which means that one country or one region does not replace another,” Khabek explained.

As per Habeck, the energy partnership means that “at best, Germany gets contractual guarantees that something can be delivered with the expansion of European and above all German infrastructure.” The expansion of the infrastructure involves, among other things, the construction of LNG terminals. “After all, it makes no sense to build terminals and gas pipelines through which gas does not flow,” the Vice Chancellor said.

So far, Russia is Germany’s largest gas supplier. After the Russian attack on Ukraine, Germany refused to ban gas imports from the Russian Federation entirely but came up with several initiatives to reduce energy dependence.

Earlier, the German authorities said they had begun preparations to replace Russian gas. To reduce gas dependence on the Russian Federation, Germany, in particular, has planned the construction of new LNG terminals to import liquefied gas from the United States and Qatar.

At the same time, some European countries, which are also dependent on Russian gas, have decided to abandon their purchases. In particular, Bulgaria will not renew the contract with Gazprom. The ten-year agreement between the country and the Russian gas monopoly expires in December 2022. Poland made a similar decision earlier.

Expanding German LNG terminals

On February 27, Chancellor Olaf Scholz, during a speech in the Bundestag, said Germany will move away from Russian gas and will switch to supplies from the United States. He said it wouldn’t happen immediately, but a principled stand has been made.

“LNG terminals should be expanded as soon as possible,” Scholz said. He said that Russia had inflated gas prices and threatened the security of the entire continent. Therefore, it can no longer be considered a normal partner.

As soon as Germany expands the network of LNG terminals to receive American gas, there will be no new contracts with Russia.

Germany also announced the adoption of laws that will provide the country with strategic energy reserves. Habeck said that now Germany is 50% dependent on Russian coal imports. That is why you need to look for other sources.

“We will have to buy gas, as well as coal in other countries (not in Russia. – Ed) in a larger volume,” Habeck said. He said that Germany could not depend on a country that no longer respects international law.

Gas and coal reserves will be formed by next winter. The relevant law is already being prepared and will be submitted soon so that gas is purchased in the summer, as per the German media. 

Habeck says he is confident that Germany will already be able to cope with the complete absence of imports from Russia. “Germany has options where to get enough gas and other resources without Russia,” he said. 


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