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10 May, 2022 11:56

Qatar, Germany in deadlock on LNG supply deal – media

The two countries are at odds over the timeframe of the contract
Qatar, Germany in deadlock on LNG supply deal – media

Germany and Qatar have failed to reach an agreement regarding long-term liquefied natural gas (LNG) supply contracts, Reuters reported on Tuesday, citing people close to the talks.

According to the outlet, Berlin will not agree to Qatar’s demand to sign deals for a duration of at least 20 years. Despite seeking to end its reliance on Russian natural gas amid the situation in Ukraine, Berlin reportedly views this timeframe as contradicting its plan to slash carbon emissions by 88% by 2040.

The issue of LNG contract length potentially putting Germany’s decarburization targets at risk is part of the ongoing discussions with Qatar,” one of the sources told Reuters, noting that Germany is not the only nation eager to secure LNG supplies from Qatar.

Qatar also wants to contractually prevent Germany from rerouting the LNG deliveries to other European states, and this measure is not welcome by the EU, the sources said.

One of the sources told the publication that the LNG deal between Qatar and Germany “is not expected to happen soon.

Qatar is the world’s largest LNG supplier. Major German power producer RWE already has a deal with Qatargas dating back to 2016 for 1.1 million tons of LNG annually until the end of 2023. RWE officials, as well as representatives from another German utility, Uniper, and German Economy Minister Robert Habeck visited Qatar in March to secure additional volumes of LNG supplies, but have not agreed on a long-term deal so far.

The delegation is set to return to Qatar later this month to resume negotiations, according to Reuters sources. They claim that Germany aims to reach a two-way partnership with Qatar, exchanging additional LNG supply contracts for assistance from German firms in the Qatari move toward sustainability.

There needs to be a gentlemen’s agreement between the Qataris and German companies, that LNG should only be the first step in a longer collaboration between the two countries,” an unnamed German industry source said.

For more stories on economy & finance visit RT's business section

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