Qatar has the third-largest natural gas reserves in the world after Russia and Iran, and shares a leading position in LNG exports with Australia and the US. What potential does an energy partnership between Germany and the World Cup host have?
As the Winter World Cup in Qatar approaches, the days in this country are getting shorter and the temperatures lower. Over the summer, the debates about saving energy may have felt very far away, but with the start of the heating season, the question of how Germany will get through the winter takes on a frosty explosiveness: Can we replace the missing Russian gas? How can Germany diversify its energy supply more?
The TV pictures alone of sweating soccer players from the desert state of Qatar, where it is quite pleasant even in the winter months with an average of around 20 degrees Celsius, will probably not transport a cozy warmth into the German living room. But resource-rich Qatar also has the world’s third-largest natural gas reserves after Russia and Iran, and shares a leadership position in liquefied natural gas exports with Australia and the United States. So what potential does an energy partnership with the World Cup host have? Can Qatari LNG contribute to securing Germany’s energy supply?
The beginning of the Russian war of aggression in the Ukraine made it relentlessly clear to us: The dependence on imports of fossil fuels – coal, oil and above all natural gas – from Russia limits Europe’s foreign policy options, causes massive price increases for private households, companies and industry and is particularly threatening to force Germany into an economic recession.
In order to get the problem of one-sided dependence on Moscow under control, active travel diplomacy began early on. One of the first destinations of Federal Minister of Economics Habeck in March was the Emirate of Qatar, which is rich in gas deposits and relatively close geographically. Not surprising, because while coal and oil imports can be replaced relatively easily thanks to liquid world markets, there are a number of challenges with natural gas, which make the number of possible new suppliers manageable.
A crucial point is the transport options for natural gas, which, in contrast to coal and oil, can only be transported via pipelines or in liquefied form as so-called liquefied natural gas (LNG) by ship. Since the reliable gas suppliers Netherlands and Norway, which are connected to Germany via pipelines, are largely working at full capacity and can therefore only replace part of the Russian natural gas, LNG undoubtedly plays a decisive role.
Experts agree that LNG imports to Europe need to be expanded. In the future, the liquid natural gas, cooled under high pressure to minus 160 degrees Celsius, will also be landed directly on German coasts, converted back into the gaseous state and fed into the natural gas grid. The Federal Government has launched the leasing of floating LNG terminals in record time, and of the total of five of these so-called Floating Storage and Regasification Units (FSRUs), two – and one privately operated one in Lubmin – are to open in Wilhelmshaven and Brunsbüttel this year get started.
Read here: Qatar dreams of winter fairy tales and wants to surprise “real fans”.
So will Qatari liquefied gas be coming to Germany as early as December 21, 2022 in order to close the supply gap that has opened up as a result of the Russian delivery stop? As of now, the answer is no.
Despite a deep bow from the Federal Minister of Economics to the Emir of Qatar and the announcement of an energy partnership, which was well received by the media, it recently emerged that there had never been any firm commitments for concrete delivery volumes from Qatar and no contracts had been signed. The reasons for this are complex, but two are of particular relevance: On the one hand, Qatar has tied itself very closely to Asia in the past, which means that it is estimated that more than 90 percent of the liquefaction capacities of a good 100 billion cubic meters of natural gas per year are already in use long-term purchase agreements exist with Asian countries.
The customers from the Far East mostly paid better than the Europeans supplied via long-distance gas pipelines from Russia and even if countries like Germany are now willing to pay higher prices, there are simply no larger quantities available for new customers in the short term.
Read here: Qatar – this is the country where the World Cup takes place
In addition, Qatar is insisting on the longest-term possible purchase agreements in view of the high level of investment involved in developing new gas fields that could meet the additional demand. This, in turn, is not very attractive for Germany, because natural gas is seen here primarily as a bridging technology, i.e. as the fossil fuel that, due to its comparatively low carbon dioxide emissions and flexible application options, should be used during the transition period until the desired full supply with renewable energies is achieved – but that’s just the way it is not a day longer than absolutely necessary.
Accordingly, the big question is whether the Federal Republic and the Emirate or companies from the two countries can reach a compromise regarding the term of new gas contracts. Since Germany is fundamentally very interested in diversifying and expanding its LNG imports far beyond the coming winter and the Qataris, for their part, are showing a willingness to significantly increase gas production, parallel interests can certainly be identified, especially in the medium to long term.
The trip by Chancellor Olaf Scholz, who visited the region together with a well-known business delegation at the end of September, shows that this should also be seen in the Chancellery. For example, in order to be able to actually secure part of the capacities from the planned development of the “North Field” with up to 60 billion cubic meters of gas per year from 2026, the Qataris will either have to be given long-term commitments or alternative forms of cooperation will have to be offered.
Kevin Oswald has been working as a consultant for energy and resources in the Agenda 2030 team in the Analysis and Consulting Department of the Konrad Adenauer Foundation since January 2022. From August 2020 to December 2021 he was a trainee in the Brazilian office based in Rio de Janeiro. After completing his bachelor’s degree in political science in Passau with a year abroad in Córdoba (ARG), Mr. Oswald studied international relations at Syracuse University in New York and the Hertie School of Governance in Berlin as part of a transatlantic double master’s program. Various internships took him to the German embassies in La Paz and Washington D.C., before he was able to gain further professional experience as a visiting associate at the think tank Agora Energiewende and as a student assistant in the planning group of the CDU/CSU parliamentary group in the German Bundestag.
These are primarily in the area of production and import of green hydrogen. Located on the east coast of the Arabian Peninsula, Qatar has excellent conditions for both wind and solar energy. With technological know-how and investments, for example in renewable energy systems or electrolysers to convert green electricity into hydrogen, German companies could play a supporting role in ramping up a hydrogen economy.
Should this succeed, Qatar would in turn be a suitable partner, initially to close the gas gap in the medium term and even to help make German industry climate-neutral in the long term through hydrogen exports. Will that happen? That will probably only become apparent after the World Cup – the German-Qatarian energy game will go into overtime for the time being.