The United Arab Emirates have agreed to supply liquefied natural gas to Germany, while Chancellor Olaf Scholz visited the Gulf state as part of a regional tour to drum up alternatives to Russian energy.
Abu Dhabi National Oil Company will deliver 137,000 cubic meters of LNG to German utility RWE later this year, which will be the first delivery to the under-construction import terminal on the northwest coast at Brunsbüttel, RWE and UAE state media said.
Adnoc is expected to reserve another five LNG shipments for German customers in 2023, a person briefed on Sunday said.
Germany has been trying to secure energy imports from sources outside Russia since the invasion of Ukraine began in February. The oil-rich UAE, though a relatively modest gas exporter, plans to double its LNG production to 12 million tons per year by 2026.
“We need to ensure that the production of LNG in the world is advanced to the point where high demand can be met without relying on the production capacity that exists in Russia,” Scholz said before announcing the deal, according to Reuters.
RWE said the deal marked “an important milestone” in the creation of LNG supply infrastructure.
But the amount of LNG Scholz has managed to get so far on his Gulf visit — starting with just one tanker in December — is small compared to the amounts Germany needs to replace the natural gas that Russia no longer supplies. Before Moscow’s invasion of Ukraine, Russian natural gas accounted for more than half of Germany’s total supplies.
Scholz, who met Saudi Crown Prince Mohammed bin Salman in Jeddah on Saturday, left for Qatar on Sunday for meetings that could unlock even greater gas reserves for Europe’s largest economy.
Qatar, the world’s largest exporter of LNG, has already signed a preliminary LNG supply agreement with Germany, but talks on the contracts have run into issues over issues such as pricing and contract duration.
In Doha, the German chancellor met Qatari Emir Sheikh Tamim bin Hamad Al Thani, and said he wanted to “make further progress” in LNG supplies to Germany, Reuters reported.
The bilateral deal with the UAE, signed with the President of the UAE, Mohammed bin Zayed al-Nahyan, also included other energy agreements, including a deal with Germany’s Steag and Aurubis for the supply of low-carbon ammonia as a fuel for hydrogen, with the aim of industrial sectors. The first shipment arrived in Hamburg this month.
Masdar, the UAE’s renewable energy vehicle, will explore offshore wind projects in the North Sea and Baltic Sea off the German coast in a bid to generate 10 GW of renewable energy by 2030.
Adnoc also delivered its first diesel supply to Germany this month as part of an agreement to supply 250,000 tons of diesel per month to a German company next year.
“This groundbreaking new agreement strengthens the fast-growing energy partnership between the UAE and Germany,” said Sultan Al Jaber, CEO of Adnoc.
The deal comes after several difficult years in the bilateral relationship since Germany halted arms exports to the UAE’s regional ally Saudi Arabia after the murder of Saudi journalist Jamal Khashoggi.
The UAE’s involvement in the war in Yemen also heightened tensions with Berlin, where many have criticized ignoring human rights issues in order to facilitate energy supplies.
In a statement on Sunday, Robert Habeck, Germany’s economy and climate minister, said businesses and citizens needed urgent help to “survive the crisis caused by the Russian war of aggression”.
“Gas prices must be reduced, costs to the economy and households must be limited,” he said. “In general, in this complex crisis, times are difficult.”
Additional reporting by Martin Arnold in Frankfurt