Germany is negotiating a long-term liquefied natural gas (LNG) supply deal with Qatar, as the European nation aims to reduce its dependence on Russian imports, officials from the two countries have confirmed.
Qatar's Emir Tamim bin Hamad Al Thani and the German Economy Minister Robert Habeck met on Sunday and the duo discussed ways to enhance bilateral relations, particularly in the energy sector, the Emiri court said in a statement.
While German officials said a deal has been clinched, Qatar stopped short of confirming the LNG agreement.
A spokesperson for the German Economics Ministry in Berlin confirmed that a deal had been finalised and that commercial terms are being worked out.
"The companies that have come to Qatar with (Habeck) will now enter into contract negotiations with the Qatari side," the German government agency spokesperson said.
However, Qatar said: “The two sides agreed that their respective commercial entities would re-engage and progress discussions on long-term LNG supplies from Qatar to Germany.”
State-owned giant QatarEnergy in a statement on Monday said the company has “been discussing the supply of Qatari LNG to Germany for a number of years with German companies".
However, until recently, such discussions did not materialise into definitive agreements due to the lack of clarity on the long-term role of gas in Germany’s energy mix and the requisite LNG import infrastructure, it added.
QatarEnergy noted the two nations are re-engaging in talks, and the “German government has taken swift and concrete actions to fast-track the development of two LNG receiving terminals in Germany".
The state-owned company added that Germany is taking up “as a matter of priority to allow for the long-term import of LNG”, and that “such scheme has the full support of the German government".
Russian exit plans
Multiple European oil and gas giants including BP and Shell have recently announced their plans to exit the Russian oil and gas market in the wake of the Ukraine conflict, but Russia continues to supply gas to many European nations.
While Qatar has offered its support to Europe in addressing a potential gas crisis, it has stressed the volume of gas needed by the European Union cannot be replaced by any one nation unilaterally, without disturbing supplies to other regions around the world.
Qatar, one of the largest global producers of LNG has limited swing capacity, as most of its gas supplies are currently contracted to long-term contracts in Asia and other regions.
The tiny emirate is massively expanding its LNG production capacity and is spending billions of dollars, but additional volumes are still years away, capping its current capacity.