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    RWE, Uniper inch closer to Qatar LNG deals: press

Summary

Reuters' report suggests a compromise on contract length and prices is within reach.

by: Callum Cyrus

Posted in:

Complimentary, Natural Gas & LNG News, Europe, Corporate, Import/Export, Political, News By Country, Germany, Qatar

RWE, Uniper inch closer to Qatar LNG deals: press

Germany's RWE and Uniper are drawing closer to an agreement on securing long-term LNG supplies from Qatar's North Field expansion project, with talks on the contract term and prices overcoming long-running differences, Reuters reported September 20, citing unnamed sources.

Germany aims to cease buying Russian energy supplies by mid-2024. Natural gas accounted for a 27% share of the nation's energy consumption in 2021, and a government paper shown to Bloomberg says it is putting up $2.5bn in credit to build LNG terminals and shore up offtake contracts with global suppliers.

An MoU for the first two floating German LNG terminals in Brunsbuttel and Wilhelmshaven was signed in August, Berlin having clinched a deal for supply to the facilities this winter.

The deal, backed by RWE and Uniper among other German distributors, was seen as a backstop against foreseen price spikes though forecasts have eased as European gas storages have filled in recent weeks.

Qatar's North Field expansion will add six LNG trains to bring Qatar's overall capacity to 126mn metric tons/year by the late 2020s, from around 77mn mt/yr today.

Germany is seeking supplies from the expansion to cover its needs in the medium term. But Reuters said in May that Berlin was reluctant to enter into too long a supply deal, because of concerns that this would undermine its climate objectives. The German government had also hoped to use Dutch benchmark indices for pricing, as opposed to the typical link to Brent oil, according to the news agency.

RWE signed a deal for up to 1.1mn metric tons/yr of Qatari LNG in 2016, but the agreement expires next year.

German chancellor Olaf Scholz is due to visit Qatar later this week, as part of a two-day tour that also involves a trip to the UAE. One of Reuters' sources said that before a deal on Qatari LNG can be finalised, the two sides will need first to agree on a framework agreement that sets out the scope for offtake negotiations.