Germany secures gas supplies from Qatar –


Germany’s Vice Chancellor Robert Habeck visited Qatar over the weekend to secure alternatives to Russian gas supplies, with little chance of immediate success in a country viewed with suspicion in Germany for its human rights abuses.

The new federal government wanted to act differently from its predecessors in its foreign policy relations by placing ethics at the center. “We will make our foreign, security and development policy more value-oriented,” says the coalition agreement read.

But Habeck had to play nice in a country viewed with suspicion in Germany for its repeated human rights and labor rights abuses – all to secure a fraction of the LNG that comes from the world’s second-largest exporter.

Before leaving, Habeck had specified that “value-oriented energy policy should become independent of fossil fuels”.

“I’m here in Doha now, on the second day of a kind of totally weird trip,” Habeck said late Sunday (March 20). “It’s the Ukraine crisis that brought me here and trying to get out of Russian gas, oil and coal as soon as possible,” he added

Habeck claims he was successful in Doha, despite initial fears that Berlin’s previous snub to the Qataris spoiled negotiations before they even started. Federal President Frank-Walter Steinmeier had already twice canceled his visits to Doha.

“The good news is that this will be provided,” said Habeck, with a view to short-term LNG deliveries, which are intended to make Germany more independent of Russian gas. “Now the companies have to do these contracts for that,” he added.

Competition for scarce LNG

Qatar is theoretically best placed to help Germany wean itself off Russian gas. The country transports 107 billion cubic meters of liquefied natural gas (LNG) per year, more than the roughly 70 billion cubic meters that Germany imports from Russia via pipelines.

The winter of 2022-23 is seen as the most crucial for the move away from Russian gas, but there are doubts whether Qatar will be able to supply much of it in the short term, despite Habeck’s positive rhetoric.

Only 10-15% of Qatar’s LNG production can be diverted and Europe would have to compete directly with Qatar’s incumbent long-term buyers, most of whom are based in Asia. Bloomberg reported.

While this will be less of an issue in a couple of years – Qatar is aiming to increase LNG production by about 60% by 2026 – officials are still knocking on Doha’s door to secure LNG cargoes in the near-term.

While the German delegation was in town, the Japanese, the world’s largest LNG importers, were also in town South Korean Prime Minister Kim Boo-kyum, another major LNG importer. All of them are competitors for the small amount of spot LNG that is available.

“This summer, rich European nations will compete against poorer emerging Asian economies, with the highest bidder taking the spoils.” writes Analyst Seb Kennedy. “This is an annual event that Asia usually wins, but there is a lot more at stake this year,” he added.

Regasification: A major obstacle for Germany

Another major obstacle to the promotion of LNG imports in Germany is the lack of regasification facilities. LNG requires special regasification terminals to turn the liquid back into a gas suitable for pipeline transport, and Germany has none of these, although construction is set to accelerate at “Tesla speeds,” as Habeck put it on March 11.

The closest LNG terminals are in Świnoujście in Poland (5 billion cubic meters per year), in Rotterdam in the Netherlands (12 billion cubic meters) and in Zeebrugge in Belgium (9 billion cubic meters), all of which cannot devote their entire capacity to German demand .

Nevertheless, the political will to do so is great in Berlin. On March 12, Chancellor Olaf Scholz’s right-hand man and adviser, Jörg Kukies, met with Qatari Foreign Minister Mohammed bin Abdulrahman Al-Thani. “We discussed bilateral cooperation, particularly on energy and corporate investments,” Kukies tweeted.

Workers’ Rights and Business Opportunities

Qatar is one of the many destinations that the Vice Chancellor will travel to in the coming days so that German households can stay warm next winter without Russian gas.

“We cannot reverse the strategic mistakes of the last few decades within three weeks,” he told ARD.

But in doing so, Habeck risks angering both his Green voters and the sensibilities of the broader German population.

Qatar has been insulted in German discourse for years. Stories of migrant workers who died during the process of building the stadiums to host the 2022 World Cup are common in Germany.

“There are only 300,000 Qataris, 10% of the population, while 3 million people live here. The rest often work here under not so good conditions,” noted Habeck.

Labor rights have improved in Qatar thanks in large part to foreign pressure. Notable improvements include the abolition of the citizen sponsorship scheme for migrant workers, which severely restricted migrant mobility, and laws preventing construction workers from working in the scorching sun.

“The laws are written, but they certainly need improvement, and secondly, they are not yet fully implemented,” Habeck added.

Despite labor law reservations, German industry seems to see opportunities. More than 120 representatives of German companies have applied to travel to Doha with Habeck. In the end, just over 20 of them were allowed to enter.

Martina Merz, CEO of the industrial giant Thyssen-Krupp, was satisfied with the trip. Habeck did great things, breaking the ice with Qatari officials, making contacts and acting very “business-minded,” she said Handelsblatt. Perhaps people have been too cautious about Qatar in the past, she concluded.

Next on Habeck’s agenda is a visit to the United Arab Emirates, with his more than 20 industry leaders in tow, to discuss, among other things, how best to build a constructive hydrogen partnership.

The Green Brief: The Price of the Freedom Gas

With Russia at war on its eastern border, the European Union has begun consulting with allies about possible alternatives to supplying them with Russian gas. However, the financial and political costs could be high.

[Edited by Frédéric Simon]


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