German utilities RWE and Uniper are in the final phase of closing long-term deals to buy LNG from Qatar’s North Field Expansion project to replace Russian gas, Reuters reported, citing three sources familiar with the matter.
Germany and Qatar have had differences over key conditions such as the length of contracts and pricing but the industry sources, who declined to be named, said the parties were expected to reach a compromise soon.
While supply deals with Qatar would be positive for Germany, they would not offer an immediate solution to Berlin’s energy crisis as the vast North Field Expansion project is not expected to come online before 2026.
Reuters reported in May that the talks had run into difficulties because Germany was reluctant to commit to deals for at least 20 years and also wanted prices linked to Dutch benchmark gas prices, rather than oil.
Europe’s biggest economy aims to replace Russian energy imports by mid-2024, a massive effort for a country that primarily relies on natural gas to power its industry.
According to Reuters, German Chancellor Olaf Scholz will travel to Saudi Arabia on Saturday for a two-day visit to the Gulf region, which also include visits to UAE and Qatar.
Scholz is expected to sign LNG contracts during his visit to the UAE, Reuters reported Economy Minister Robert Habeck as saying.
Qatar’s North Field Expansion project includes six LNG trains that will ramp up the country’s liquefaction capacity from 77 million tonnes per annum (mtpa) to 126 mtpa by 2027.
Qatar is partnering with international companies in the first and largest phase of the nearly $30 billion expansion that will reinforce its position as the world’s top LNG exporter.
Qatar has signed agreements with TotalEnergies, Eni, Shell, Exxon Mobil Corp and ConocoPhillips for stakes in the project.