Germany and the United Arab Emirates have signed a “landmark” gas deal to supply liquefied natural gas to Europe’s largest economy by the end of December.
The major deal for the delivery of 137,000 cubic meters of LNG, to the new LNG terminal in Brunsbüttel near Hamburg, was inked between Germany’s RWE and Abu Dhabi National Oil Company (ADNOC) in the presence of UAE President Sheikh Mohamed bin Zayed Al Nahyan and German Chancellor Olaf Scholz who is on a two-day trip to the Persian Gulf region.
“I welcome the signing of the joint declaration” on the “energy security” agreement, UAE state news agency cited Scholz as saying.
“We need to make sure that the production of LNG in the world is advanced to the point where the high demand that exists can be met without having to resort to the production capacity that exists in Russia,” the chancellor said while talking to the journalists before the deal was reached.
A total of approximately 0.95 billion kilowatt hours of electricity will be supplied to Germany in the first delivery, as per the news agencies.
Although the initial amount of electricity to be delivered by UAE is relatively small, it’s a politically significant deal to increase gas supplies from outside of Russia as Chancellor Olaf Scholzlook for ways to strengthen ties with the Gulf and discover alternative energy sources.
ADNOC has also reserved an additional unspecified number of LNG cargoes for Germany in the coming year, 2023.
According to data from research firm Enerdata, two new planned floating LNG terminals in Germany will eventually be able to obtain up to 12.5 billion cubic meters of LNG a year, equivalent to nearly 13% of the country’s total gas consumption in 2021.
Germany replacing Russian gas
The German government is now constantly in talks with multiple countries to gradually broaden the country’s gas supply as it moves to replace all of the Russian energy imports by 2024.
Russia accounted for 55% of Germany’s gas imports in 2021 but this level declined to 26% by the end of June 2022. Germany is now replacing Russian gas with LNG to cope with the upcoming winter.
German gas storage 90% full ahead of winter
Meanwhile, the gas storage facilities in Germany are more than 90% full as the country continues its efforts to prepare for the upcoming winter, according to data released by the Aggregated Gas Storage Inventory (AGSI).
The German government has planned for 95% of storage capacity to be filled by November 2022 to get through winter without Russian gas imports.