Here’s how Eni, Uniper and Scholz will gas Qatar
On Saturday, German Chancellor Olaf Scholz will leave for the Gulf in search of LNG. Meanwhile, Uniper and Rwe are close to a long-term agreement with Qatar. The country has relied on foreign companies (such as Eni) to develop its liquefaction capabilities. All the details
The German energy companies RWE and Uniper are close to signing long-term agreements with Qatar for the supply of liquefied gas (LNG).
PRICES ASSOCIATED WITH THE TTF
The negotiations are complicated – industry sources tell Reuters – because the parties are distant on some key points such as the length of the contracts and the price, but they should still reach a compromise soon.
In particular, the two companies would be unwilling to engage in agreements lasting twenty years, and would like the contract prices to be associated not with those of oil but with the values of the TTF (the gas exchange point that acts as a hub for Continental Europe; located in Amsterdam, the Netherlands).
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IS QATAR REALLY THE SOLUTION TO THE CRISIS?
Germany is very dependent on natural gas, and in particular on that coming from Russia, for the supply of its industries (it is the country with the largest economy in Europe); after the invasion of Ukraine, however, it decided to eliminate all energy imports from Moscow by mid-2024.
Qatar – one of the largest LNG exporters in the world, together with the United States – can be useful for German plans to replace and diversify fuel suppliers, but it does not represent an immediate solution: the great North Field Expansion project, the one to be which Berlin would like to tap into for gas, will likely not be active until 2026.
SPOT PURCHASES
Currently, RWE and Uniper buy Qatari LNG on the spot market (wholesale and daily). RWE signed a contract with Qatar in 2016 to supply 1.1 million tons of LNG per year, but it will expire next year.
SCHOLZ'S JOURNEY TO THE GULF
This Saturday, German Chancellor Olaf Scholz will leave for a two-day visit to the Gulf region: he will visit Saudi Arabia, the United Arab Emirates and Qatar, and is expected to sign LNG agreements in Abu Dhabi.
On the other hand, it is unlikely – writes Reuters – that RWE and Uniper will be able to sign contracts with Qatar during Scholz's visit: both because the representatives of Uniper will not participate in the trip, but above all because these occasions serve to reach very general declarations of intent. , which only later turn into specific commercial agreements.
THE NORTH FIELD EXPANSION PROJECT
The North Field Expansion project consists of six liquefaction units (trains, in jargon) that will bring Qatar's capacity from 77 to 126 million tons per year by 2027.
To carry out the first phase of the project (as well as the largest: four out of six trains), worth almost 30 billion dollars, Qatar has signed collaboration agreements with several international oil companies such as Eni, TotalEnergies, Shell, ExxonMobil and ConocoPhillips .
Once the expansion project is completed, half of the volume of LNG produced by North Field will go to Asia and the other half to Europe: demand for this fuel is strong in both markets.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/qatar-gnl-north-field/ on Tue, 20 Sep 2022 11:46:08 +0000.