Germany lines up natural gas deals with Qatar and the UAE as it scrambles to replace Russian supplies
- Germany is stacking up natural gas deals with Qatar and the UAE as Russia cuts off supply.
- It's aiding the shift by releasing $2.5 billion of credit to inject into alternative gas supplies.
Germany is closing in on natural gas deals with Qatar and the United Arab Emirates as it seeks to replace Russian energy, according to media reports.
To facilitate such deals, the crisis-deep country released $2.5 billion to secure alternative gas supplies before winter hits, Bloomberg reported.
German utilities RWE and Uniper are nearing an agreement on long-term deals to buy liquefied natural gas (LNG) from Qatar's North Field Expansion project, three sources familiar with the matter told Reuters.
The talks between Germany and Qatar have been riddled with differences over the length of contracts and pricing, but a settlement is expected to be reached soon, Reuters reported.
Should the deal go through, Qatar would not be able to offer Germany immediate deliveries, as the project is expected to launch in 2026 at the earliest.
"Uniper is currently working hard to diversify its sources of gas supply. Qatar also plays an important role in this," the major utility told Reuters. RWE said it was in good and constructive talks with the Middle-Eastern country.
Europe has become caught in an energy crisis after Russia's state-run Gazprom slashed and then completely shut off gas deliveries to the continent via the Nord Stream 1 pipeline, in retaliation to Western sanctions over the Ukraine war.
Germany, which is highly dependent on Russian gas, is scrambling to secure alternative energy supplies before the winter months and has resorted to coal-generated power in the process. The EU has also pledged to reduce the bloc's reliance on gas from Russia.
The gas squeeze has put pressure on Germany's economy, and its central bank has warned the economy is already shrinking and will continue to contract through winter as the energy crisis worsens.
In addition to talks with Qatar, Germany is also lining up LNG deals with the UAE, where German Chancellor Olaf Scholz is anticipated to sign contracts during a visit to the region, per Reuters.
"The gas offering is slowly broadening. The government is permanently in talks with many countries," Germany's economy minister Robert Habeck said.
Germany's race to shore up energy supplies looks to be going well, as German officials said the country's natural gas storage has reached 80% full and is on track to meet its October storage targets early.
But Russia's president, Vladimir Putin, on Friday said the EU could just turn on the new Nord Stream 2 pipeline, whose launch has been shelved since February, if it wants additional gas supplies.
It also appears new deals are still pushing through, as the first cargo from Russia's Portovaya LNG, plant near the Nord Stream 1 pipeline, will go to Greece.
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