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Germany Inks 15-Year LNG Deal With Qatar

Qatar will provide liquefied natural gas to Germany for at least 15 years beginning in 2026 under new deals that state firm QatarEnergy and U.S. company ConocoPhillips signed on Tuesday.

Per two sale and purchase agreements, up to 2 million tons per annum (MTPA) of LNG from Qatar will be delivered to Germany by a wholly-owned subsidiary of ConocoPhillips, which will purchase the quantities and deliver them to the Brunsbüttel LNG import terminal in northern Germany.

The LNG volumes will be sourced from the two joint ventures between QatarEnergy and ConocoPhillips that hold interests in Qatar’s North Field East (NFE) and North Field South (NFS) projects—the mega projects for expanding Qatar’s LNG export capacity expected to come online between 2026 and 2027.

Qatar has traditionally preferred long-term supply deals with customers, at which Europe balked earlier this year. But more recently, even European companies have started negotiations for longer-term supply with LNG providers, aiming to ensure the security of supply and reduce exposure to volatile spot LNG prices. Before the Russian invasion of Ukraine, Germany was Russia’s top pipeline gas customer in Europe, but it is pivoting now to LNG imports.

Commenting on the deal with Germany, Saad Sherida Al-Kaabi, Qatar’s Minister of State for Energy Affairs as well as the President and CEO of QatarEnergy, said, “These agreements are momentous for several reasons. They mark the first ever long-term LNG supply to Germany with a supply period that extends for at least 15 years, thus contributing to Germany’s long-term energy security.”

“Germany is the largest gas market in Europe, with significant demand in the industrial, power, and household sectors, and we are committed to contribute to the energy security of Germany and Europe at large,” Al-Kaabi added.

“These agreements will provide an attractive LNG offtake solution for our new joint ventures with QatarEnergy and position the joint ventures as reliable sources of LNG supply into Europe,” ConocoPhillips Chairman and CEO Ryan Lance said.

The long-term deal to supply LNG to Germany comes a week after Qatar signed the longest-term contract in the history of the industry in a deal to supply LNG to Chinese state energy giant Sinopec for 27 years.

By Tsvetana Paraskova for Oilprice.com

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