Doha and Germany recently signed a deal focusing on liquified natural gas and hydrogen trade.
Qatar’s Minister of State for Energy Affairs Saad Sherida Al-Kaabi dismissed reports over challenges Doha and Berlin have been facing amid recent energy talks, the official told Germany’s Handelsblatt on Saturday.
Germany was amongst the European countries that turned to liquefied natural gas (LNG) giant Qatar, following the Russian invasion of Ukraine on 24 February.
The European country is currently seeking to reduce its heavy dependence on Russian gas.
Citing a source privy to the talks, Reuters reported earlier this month that talks between the two countries were facing challenges, pertaining primarily to the long-term period of the contracts.
“That’s complete nonsense. We have just started talking,” Al-Kaabi told the German media outlet.
He also described the talks with Germany as “fruitful” and that “the foundation for excellent energy cooperation” has been established.
Al-Kaabi further revealed that the Gulf state is in talks with six German companies and will know whether or not the contracts will be concluded within a few months.
“We have specifically approached the major gas traders and gas consumers [and] invited them to negotiate with us,” he stated.
The energy official’s comments came on the sidelines of Qatar’s Amir Sheikh Tamim bin Hamad Al Thani’s visit to Berlin as part of a tour in the region. During the visit on Friday, Al-Kaabi and German Economy Minister Robert Habeck inked a joint declaration to expand bilateral energy cooperation.
The deal focuses on LNG and hydrogen trade and entails the creation of a Qatari-German working group that will meet regularly to develop businesses of the two gasses. Another group will also to focus on renewable energy.
“Just as buyers want to diversify their sources of supply, we value diversifying our buyers. I don’t want to sell all our gas to Germany,” said Al-Kaabi.
The Qatari official stated that the latest agreement “sets the framework for cooperation on all energy issues.”
“It starts with the topic of LNG, [and] goes on to the expansion of grids and renewable energies, ending with the topic of hydrogen,” explained Al-Kaabi.
He added,”If German companies are being unreasonable compared to others, we will tell them so. But the basic principle is that we support Germany. There is political will on both sides to intensify cooperation.”
Speaking to Handelsblatt on Friday, Qatar’s Foreign Minister Sheikh Mohammed bin Abdulrahman Al-Thani said that his country hopes to start sending LNG to Berlin in 2024.
“We want to have our US Golden Pass liquefied natural gas plant in Texas, in which Qatar Energy holds a 70% stake, ready to deliver to Germany as early as 2024,” said Sheikh Mohammed.
Russia is Germany’s largest supplier of gas, importing 42.6 billion cubic metres from Moscow.
The German economy minister previously stated that he plans on making his country independent of Russian coal and gas in less than a year.
Germany had also ratified a new law in an effort to expand LNG infrastructure, enabling more deliveries to the country.
Increasing production
Qatar is on its way to becoming the world’s leading LNG producer through its $30 billion North Field Expansion project.
The project is the biggest of its kind in the world and aims to increase Qatar’s annual LNG production capacity from 77 million metric tonnes to 126 million tonnes by 2027. Al-Kaabi confirmed that the beginning of the additional gas production will take place in 2026.
Qatar has been at the centre of energy security talks following the Russian invasion of Ukraine. However, Al-Kaabi stressed that the energy crisis had started as far as 2015, noting that the demand increased following the post Covid-19 economic recovery.
“From 2015 to now, global investment in oil and gas production has declined by 20 to 25%, every year. At the start of the Covid-19 crisis, oil prices were actually negative in the short term for the first time ever in history,” said Al-Kaabi.
Other European countries have turned to the Gulf state over the past months for LNG supply. The countries include Italy, the UK and France.
Europe, which was already dealing with an energy crisis, received 40% of its gas supplies from Moscow, with almost a third of the shipments passing through Ukraine. Al-Kaabi previously stated that Qatar cannot unilaterally replace Europe’s gas supply.
Responding to a question over accelerating gas projects, such as the North Field and Golden Pass in Texas, Al-Kaabi said that they cannot be completed overnight.
“We decided in 2019 to implement our ‘Golden Pass’ project in Texas. That will bring another 16 million tons per year. That’s a real additional fresh volume. It is predestined for the European market,” he said.
He explained that the increases from the domestic and US projects would amount to 65 tonnes a year.
“We are approaching a doubling of our production,” said the Qatari official, adding that the country has officially sold 100% of its production, as the terms of each contract vary.
With Asian consumers making up the majority of Qatar’s LNG buyers under long-term agreements, Al-Kaabi said that he has doubts European buyers will replace them.
