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Germany, Qatar eye cooperation in LNG trade, sign declaration of intent


Working group created to promote LNG, hydrogen trade relations

Qatar eyes supply to Germany from its under-construction US terminal

Germany expediting massive rollout of LNG import capacity

  • Author
  • Stuart Elliott
  • Editor
  • Alisdair Bowles
  • Commodity
  • Energy Transition LNG Natural Gas Shipping

Germany and LNG powerhouse Qatar plan to develop bilateral LNG trade relations as part of a joint declaration of intent on energy cooperation signed May 20.

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The new pact, inked during a Qatari state visit to Germany, comes as Berlin looks to fast-track a number of new LNG import terminals to reduce its dependence on Russian gas imports.

Germany -- which currently has no LNG import infrastructure -- hoped to secure LNG supply agreements with Qatar following a visit to Doha by economy minister Robert Habeck in March, but no deals have yet been announced.

As part of the new cooperation pact, the German economy ministry and state-owned QatarEnergy jointly published a roadmap for the energy partnership that outlines the structure and the planned measures of the cooperation.

A working group was also announced to promote the development of bilateral trade relations in the field of LNG and hydrogen.

"The working group will support the cooperation between actors of the private sector, who are active along the value chains for LNG and hydrogen," they said.

Germany is planning to deploy four floating LNG import facilities on its northern coast, while two permanent onshore terminals are also under development.

The German Parliament on May 19 approved a new law designed to accelerate the approval process for new LNG import terminals.

Golden Pass supply

QatarEnergy in March said it had begun talks on long-term LNG supply to Germany after receiving assurances that Berlin was serious about building up its ability to import gas.

No supply agreements have yet been finalized, with sticking points reported to include contract duration, price indexation and destination clauses.

However, in an interview with German newspaper Handelsblatt published May 19, Qatar's foreign affairs minister Mohammed bin Abdulrahman al-Thani said Qatar could supply Germany with LNG from its Golden Pass terminal in the US once the project is completed.

"We want Golden Pass to be ready by 2024 and would be able to deliver to Germany," he said.

QatarEnergy holds 70% in Golden Pass, with ExxonMobil holding the remaining 30% interest. The terminal is currently under construction and slated to begin operations in 2024.

In Qatar itself, Doha is working on its North Field expansion project, with the first new LNG trains expected online in 2025.

Qatar currently has an LNG production capacity of some 77 million mt/year (106 Bcm/year), but can produce above nameplate capacity.

It has plans to boost production capacity to 110 million mt/year with the addition of four more trains from 2025 and to 126 million mt/year with the addition of two further trains by 2027.

European supply

Qatar is a key LNG supplier to the European market, with deliveries totaling some 23 Bcm in 2021, according to data from S&P Global Commodity Insights, meeting around 5% of total European consumption.

Its biggest markets last year were Italy (6.6 Bcm) and the UK (6.2 Bcm), followed by Belgium (3 Bcm), Spain (2.7 Bcm) and Poland (2.4 Bcm), the data showed.

Smaller volumes were also delivered to Greece, Turkey, Croatia, the Netherlands, France and Portugal.

Al-Thani said in the Handelsblatt interview that Qatar was currently doing "everything possible" to help its European partners.

"We leave whatever volume we could deliver to Europe and do not divert LNG tankers," he said.

It comes as European gas prices remain at sustained highs and at a premium to spot Asian LNG prices.

According to Platts assessments by S&P Global, the TTF month-ahead contract was priced May 19 at $27.81/MMBtu compared with a JKM front-month assessment of $23.04/MMBtu.

Asia was Qatar's biggest market for LNG deliveries last year, with a total of 78.5 Bcm delivered. India, South Korea, China and Japan were the biggest buyers.

Qatar was the biggest LNG exporter globally last year with total supplies amounting to 110.2 Bcm of gas equivalent, according to S&P Global data.

It was followed by Australia (107.2 Bcm) and the US (96.3 Bcm).