Germany has concluded a contract with Qatar for the supply of liquefied natural gas (LNG) which will help the European country to wean off its dependence on Russian energy.
But the deal is a long-term solution and will do little to slow the current flow of European money into Russian coffers, estimated at $285m (£217m) a day for oil alone.
German Economy Minister Robert Habeck announced the deal after talks in Doha, where he was accompanied by German business leaders. “It’s great that I can say that it was firmly agreed to enter into a long-term energy partnership – a cooperation,” Habeck said. “Companies that are now involved in this trip will enter into contract negotiations with the Qatari side.” He gave no detailed figures on planned imports from Qatar.
Habeck, leader of the Green Party in Germany’s coalition government, has come under heavy criticism in recent weeks for refusing to agree to a full energy embargo on Russia, as Ukrainian President Volodymyr Zelenskiy wanted. In a speech to the Bundestag last week, Zelenskiy accused Germany of having only three priorities: “economy, economy, economy”.
Polls show a majority of Germans would be willing to make sacrifices, including higher gas prices, if it would help defeat Russia, but the German government doesn’t believe the poll or think the public does not understand the real risk of mass unemployment that an embargo would entail.
Habeck’s visit to Qatar follows Boris Johnson’s seemingly unsuccessful trip to Saudi Arabia and the United Arab Emirates to try to persuade two traditional British allies in the Gulf to increase oil production.
Qatar is expected to nearly double its LNG production by 2025. Habeck has promised that Europe is zeroing its energy flow from Russia, but at present Germany has not no LNG terminals. Two have just been given the green light, in Brunsbüttel and Wilhelmshaven, but their construction could take three years.
Germany imported about 56 billion cubic meters of natural gas from Russia in 2020. Nearly 55% of its gas imports came from Russia, with 40% of gas demand in Germany coming from industry. Total EU gas imports from Russia amount to approximately 168 billion cubic meters.
In 2020, Qatar exported 106 billion cubic meters, selling the bulk of the product to Asian markets.
In Doha, Habeck stressed that the future of Europe was to develop supplier diversity, and that there would be little point in Germany shifting its dependence from one supplier to another. Germany is also in talks with Norway, Canada and the United States. He admitted that previous German administrations had made a mistake in becoming so dependent on Russia.
Moscow also supplies 34% of German oil, mainly along the Druzhba pipeline.
As a result, Germany has insisted that the EU not sanction two banks that handle German purchases of Russian energy.
The former head of Ukraine’s Naftogaz energy company, Andriy Kobolyev, believes Germany could take a tougher line by continuing to take Russian energy but refusing to pay for gas until Russia pulls out. Ukraine. He said Russia couldn’t just cut off the gas supply and there would be enough to get Germany through the next winter.
Habeck has ruled out canceling Germany’s planned nuclear shutdown, scheduled for the end of 2022. But he would be open to extending the life of coal-fired power plants, all of which are due to close by 2030.
Disputes inside Germany are raging over whether it would be possible to cut off Russian energy.
Bruegel, a Brussels-based think tank, has suggested that the EU could survive next winter if all Russian pipeline imports are halted, though that would require painful measures including electricity rationing.
The EU itself has said it aims to cut the bloc’s gas imports from Russia by almost two-thirds by the end of 2022 and make Europe independent of all Russian fossil fuels well. before 2030.
French Finance Minister Bruno Le Maire hinted that France was ready to go further: “Should we immediately stop buying Russian oil, should we, a little later, stop importing Russian gas? The president has never ruled out these options.