Substitute for Russian gas: What did Habeck’s energy journey bring?

LNG from Qatar and fracking gas from the USA – on his energy trips, Economics Minister Habeck tried to find alternative sources for Russian gas imports. The balance sheet is mixed.

The expectations of German industry were high. Federal Economics Minister Robert Habeck traveled to Qatar and the United Arab Emirates with a top-class business delegation, including the CEOs of RWE, Siemens Energy and ThyssenKrupp. It was about paving the way for alternatives to Russian gas supplies. More liquid gas deliveries are crucial for the security of supply for German companies, said Martin Wansleben, General Manager of the Association of German Chambers of Industry and Commerce (DIHK), in the run-up to the trip.

In fact, several cooperation agreements were concluded on Habeck’s golf trip. “If we might still need Russian gas this year, not in the future. And that’s only just beginning,” said the minister in Qatar. The agreements concluded show perspectives. However, nothing concrete that can be counted for the short-term diversification of the supply structure has yet emerged.

Vague energy partnership with Qatar

Germany and Qatar signed an energy partnership in Doha. It provides for long-term deliveries of liquid gas (LNG), the expansion of renewable energies and energy efficiency measures. Habeck left open when and how much liquid gas will be delivered. However, specific amounts were discussed.

German companies should now conclude the individual supply contracts. Habeck sees himself only as a door opener. Or better as a negotiator. Because the years of talks between Doha and Berlin have recently stagnated. The negotiations therefore needed a “motivational push”, said Habeck in flowery words on the sidelines of the trip in Doha.

Hydrogen agreement with the Emirates

The agreement concluded with the United Arab Emirates is even more long-term. At the end of his “energy mission”, Habeck announced an agreement on hydrogen cooperation in the eco-model city of Masdar City. It includes five projects. Siemens Energy, Lufthansa and the Masdar company from the Emirates want to produce synthetic kerosene for climate-neutral aviation. RWE and the state-owned Abu Dhabi National Oil Company have agreed to work together to import low-carbon and green hydrogen and hydrogen derivatives such as ammonia.

LNG deliveries mostly long-term

Experts doubt that the deals with the Gulf States will bring more energy to Germany in the short term. The LNG deliveries are often only long-term. Qatar’s Energy Minister Saad al-Kaabi recently made this clear. “Most LNG supplies are tied to long-term contracts and clear destinations,” he said shortly after the Russian invasion of Ukraine.

According to Andreas Goldthau, professor of public policy at the University of Erfurt, Qatar has sold 90 to 95 percent of its LNG production over the long term. A maximum of ten percent of the quantities could end up on the sports market and be bought at short notice.

Andreas Schröder, energy expert at ICIS, is similarly skeptical. In the short term, Qatar will not solve Europe’s and Germany’s gas dependency on Russia, but only after two to three years, he said tagesschau.de. “Qatar can deliver immediately, but Germany cannot import.” Because an LNG import terminal (in Brunsbüttel) will probably not come before 2023. “Probably not until 2024.”

Norway wants to deliver more

Habeck’s visits to the USA and Norway give more hope. There the minister was promised higher gas deliveries. Norway, for example, wants to increase natural gas production in the coming months and deliver more to Europe in the summer. Gas exports from the Oseberg field could be increased by around a billion cubic meters by the end of September, operator Equinor said last week. In addition, the output in the Heidrun field can be increased by 0.4 billion cubic meters. In addition, Norway wants to help Germany with special ships for LNG deliveries.

“More natural gas from Norway is of course a good option,” says energy expert Hans-Wilhelm Schiffer. After all, the Baltic Pipe with a capacity of ten billion cubic meters, which connects Norway with Poland, is expected to go into operation as early as autumn of this year.

The USA are already bringing more LNG to Europe

In the short term, higher volumes could come from the USA in particular. In the past few months and weeks, the USA has announced that it will expand its LNG capacities. According to industry experts, they could replace Australia and Qatar as the world’s largest LNG exporter this year. Above all, the USA could increase its fracking capacities, since the production of shale gas is worthwhile when oil prices are high.

So far, Australia has been the main LNG export country with 87.1 million tons. Qatar, which has the third-largest gas reserves in the world, is number two with 77.4 million tons, closely followed by the US, which exported around 71.6 million tons in 2021.

In the recent past, significantly more American LNG has come to Europe and Germany. From September to January, the quantities have doubled, says Florian Hasler, partner and managing director of the energy consulting company e.venture Consulting (e-VC). tagesschau.de. “It was purely market-driven.” Because the European LNG price had risen significantly, the USA had increasingly directed its ships to Europe.

Expert: Additional potential remains limited

However, the potential in the coming years is limited. In a study, Hasler from e-VC calculated that the USA could provide additional capacities of nine billion cubic meters by 2025, possibly a little more. In Norway, he expects eleven billion cubic meters of additional volumes.

Qatar has the greatest potential. Around 23 billion cubic meters of additional capacity are possible here by 2025, he says. Of these theoretically around 43 billion cubic meters of LNG quantities from Qatar, Norway and the USA, Germany would at best get a third. Consequently, this would not be enough to replace Russian gas.

Habeck is not the first economics minister to promote oil and gas supplies in the Gulf States. Other countries such as Austria and Japan recently came to the Emirates and Qatar with ministers and business delegations in order to reduce their dependence on Russian gas imports. Energy experts speak of a “show run” by Western governments.