German minister satisfied with 15-year Qatar LNG deal

BERLIN (Reuters) -German Economy Minister Robert Habeck said on Tuesday he was happy with the length of a liquefied natural gas (LNG) supply deal struck with Qatar, as Berlin pursues new energy partnerships after a plunge in gas from Russia.

“Fifteen years is great,” Habeck told a business conference in Berlin, referring to the length of the contract. “I wouldn’t have had anything against 20 (years) or longer contracts.”

However, Habeck pointed to Germany’s plan to become carbon-neutral by 2045, placing limits on the quantities of gas the country would receive in the future.

Germany will have to start reducing its gas consumption from the mid-2030s if it wants to meet its ambitious goal, he added

Meanwhile, Qatar’s energy minister Saad al-Kaabi said in an interview with Germany’s Bild newspaper published on Tuesday that he sees no limit to the amount of LNG that the country is willing to ship to Germany.

QatarEnergy and ConocoPhillips on Tuesday signed two sales and purchase agreements to export 2 million tonnes LNG annually to Germany for at least 15 years from 2026.

The LNG is to be delivered to a planned terminal in Brunsbuettel.

A handful of floating terminal projects (FSRUs) are emerging around Germany to bring spot cargoes ashore more quickly as a stop-gap until fixed, land-based terminals are up and running.

Germany also received more spot gas from LNG terminals in neighbouring European countries.

Habeck did not provide further details on the agreement.

He said Germany would purchase the most favourable offers available. “That includes Qatar, but it’s also not the only supplier on the world market,” he added.

Utility industry association BDEW said the contract’s 2 million tonnes were equivalent to 2.8 billion cubic metres (bcm) of gas annually, equivalent to around a third of the capacity of the envisaged Brunsbuettel terminal to be completed in 2026.

“This contract alone replaces around 6% of Russian gas shipments in 2021,” BDEW said.

“This is not an inconsequential volume and a big step in diversifying supplies,” Rystad Energy senior LNG analyst Kaushal Ramesh said of the deal.

(Reporting by Rachel More and Christian Kraemer, additional reporting by Vera Eckert and Marwa Rashad, Editing by Madeline Chambers and Alexander Smith)