Habeck courts liquefied natural gas (LNG) in the Gulf

After his meeting with the Emir of Qatar, Habeck can at least announce that he is aiming for a long-term energy partnership with Qatar. German companies could now enter into in-depth contract negotiations for the purchase of LNG.

This is by no means a promise of delivery, but it is a good sign. Talks about Qatar’s investments in German energy infrastructure could also be continued, Habeck said after his meeting with the emir.

It has long been said in the industry that Qatar is considering participating in the construction of a German LNG terminal. There is no confirmation for this.

During his three-day trip, which will end in the United Arab Emirates on Monday, the Economics Minister would probably have preferred to focus exclusively on the future topic of hydrogen and the expansion of renewable energies in the Gulf region. But reality makes it urgently necessary to set other accents. The task now is to protect Germany from a gas bottleneck. Security of supply beats climate protection.

Qatar is one of the top addresses when it comes to LNG. Together with the USA, the Gulf state is in a neck-and-neck race for the title of the world’s largest LNG exporter. In 2019, Qatar exported almost 107 billion cubic meters of gas. Germany consumes around 90 billion cubic meters per year, 55 percent of which comes from Russia.

The heads of Bayer, RWE and Thyssen-Krupp accompany the minister

It is the fear of a shortage of natural gas next winter that drives Habeck. The trip to Qatar and the United Arab Emirates was not planned well in advance. The lead time was less than two weeks.

More than 120 interested parties from business wanted to take part, and around two dozen company representatives were finally awarded the contract. Among them are Bayer boss Werner Baumann, RWE boss Markus Krebber, VNG boss Ulf Heitmüller, EWE boss Stefan Dohler, and Christian Bruch, boss of Siemens Energy, as well as Thyssen-Krupp boss Martina Merz – but also representatives of medium-sized companies.

From the CEOs’ point of view, it was high time to visit Qatar. Perhaps in the past people were too reserved with regard to Qatar, says Martina Merz. The Thyssen Krupp boss gave the minister good marks: he succeeded in breaking the ice in talks with Qatari officials. He provides contacts and acts “very business-oriented”.

RWE boss Krebber emphasizes that the Gulf region as a whole and Qatar in particular are important energy suppliers. That is why it is good and important to exchange personal information again after the interruptions of the Corona period and to resume old contacts.

Qatar plans to increase production – but only for 2026

Habeck acts out of an emergency. Doubts about the reliability of Russian natural gas supplies are growing. And since Russia’s attack on Ukraine, the question has not only been whether Russia itself will stop or cut back supplies. On the contrary, there are important voices in German politics that call for taking the initiative and placing an embargo on Russian energy supplies.

The energy minister is in line with Chancellor Scholz on this issue: both urgently warn against an embargo because they consider the consequences for the economy to be incalculable. Only on Friday at a meeting of representatives of the Federal Ministry of Economics and the Federal Network Agency with representatives from industry and the energy sector did it become apparent that Germany is not prepared if Russian natural gas should no longer flow.

>> Read also: Habeck’s difficult search for new sources of supply for gas, oil and coal

But does the quick rescue in an emergency come from Qatar? One thing is clear: with a view to next winter, deliveries from Qatar can only be a small part of the solution. Because most of the country’s LNG is contracted out for years.

The Qataris have sold 90 to 95 percent of their production on a long-term basis. Around 80 percent of deliveries from Qatar go to Asia. Customer number one is South Korea, followed by India, China and Japan. Qatar supplies the rest of the LNG production to Europe, mainly to Italy and Great Britain.

What is left for Germany? Not much at the moment. Of course, LNG can be procured from Qatar on the spot market from time to time in the coming weeks and months. But that doesn’t fundamentally change the situation.

LNG from Qatar can only make a significant contribution to the diversification of German gas supplies in the medium term. The Qataris have announced that they intend to increase their export volume from 107 to 174 billion cubic meters by 2026.

During his trip, Habeck emphasizes again and again that Qatar alone cannot be the solution for replacing the Russian supplies. He points to LNG producers such as Canada, the US, Australia and Norway. It is about securing as many sources of supply as possible in order to avoid one-sided dependencies.

The question remains whether German companies are welcome customers in Qatar. Insiders point out that the Qataris may not feel sufficiently appreciated and taken seriously by Germany. Most of the time, top German politicians have avoided the country.

Federal President Frank-Walter Steinmeier had to cancel a planned trip to the Gulf state twice, once because of the corona pandemic and once because of the Ukraine conflict. This is not well received in Qatar and takes revenge when it comes to the best starting positions for supply contracts.

Other European countries could have more success in Qatar. Boris Johnson, for example, has been taking care of Qatar for a long time and also has media-friendly conversations with the emir. That makes an impression in Qatar.

And why should Qatar bet on Germany of all things, the country that wants to completely say goodbye to fossil energy sources faster than most other countries in the world? Qatar ticks completely differently: “The future of the world is gas” is a frequently quoted statement by the Qatari Minister for Economic Affairs. You don’t see it that way in Germany.

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