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Monday, 26 September 2022

Germany’s Scholz leaves the region with no immediate solution to his energy woes

Scholz’s quest for Gulf gas didn’t quite pan out: German Chancellor Olaf Scholz’s whistle-stop tour around the Gulf over the weekend was supposed to secure the country new, long-term supplies of gas as it tries to enter its post-Gazprom future with minimum blackouts and as shallow a recession as possible. After spending two days talking to officials in Abu Dhabi, Doha and Jeddah, the chancellor walked away with a single, 137k cubic-meter shipment of LNG courtesy of the UAE and a non-binding agreement with Adnoc to deliver more next year, Emirati state media and German utility company RWE said yesterday. Scholz’s visits to Qatar and Saudi Arabia did not appear to have yielded immediate agreements.

Debuting Germany’s new LNG terminals: The shipment will be the first sent to Germany’s floating LNG terminal at Brunsbüttel, which RWE called an “important milestone” in the country’s development of LNG infrastructure.

Another five coming? A source told the Financial Times that Adnoc could send another five cargoes next year.

Germany needs the gas: Europe’s largest economy is facing a long, cold winter without Russian gas after Gazprom cut flows through the Nord Stream pipeline earlier this year. The energy crisis is sending shockwaves through the country’s industrial sector, while the government has been forced to nationalize the country’s biggest utilities company which faced collapse due to the skyrocketing gas and electricity prices.

A lot of gas: The country is now looking to find substitutes for the 142 bn cbm of gas it imported from Russia last year, an amount that a few shipments of LNG from the UAE doesn’t begin to replace.

France is doing a better job of tapping the region’s resources: French oil major TotalEnergies said Thursday it will invest USD 1.5 bn in the expansion of Qatar’s North Field, a move that could hand it valuable supplies of natural gas. This comes a few months after the company took a 25% stake in Qatar’s new USD 30 bn gas project, which is slated to be the biggest in the world.

The visit wasn’t all fossil-fuel-related: Emirati state-owned renewable energy company Masdar signed an MoU with German utility company RWE to explore wind projects off the German coast, according to a statement carried by WAM. Areas in the North and Baltic Seas could generate up to 10 GW of power by 2030, though it remains unclear how exactly the two companies will work together and whether Masdar has made any specific commitments to developing the area.

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