Germany, like many European nations, is being hit hard by the energy crisis and soaring prices. As a result, the country risks recession as early as 2023. In addition, its industrial production is declining. Thus, Olaf Scholz, German Chancellor, is looking for alternatives to Russian gas in order to ensure the country’s supply as winter approaches.
In this context, Olaf Scholz turns to the Middle East and more particularly to three Gulf States: Saudi Arabia, the United Arab Emirates and Qatar. The aim is to strengthen the energy partnership between Germany and these countries.
Germany relies on Saudi Arabia
In fact, Olaf Scholz met with the Crown Prince of Saudi Arabia, Mohammed bin Salman. It is therefore a matter of deepening the energy partnership between the two states. However, Germany intends to go beyond the issue of fossil fuels. Thus, renewable energies and renewable hydrogen were also at the heart of this meeting.
In addition to the energy issue, the German Chancellor also mentioned the issue of human rights. The murder of Jamal Khashoggi, a journalist, four years ago caused a worldwide outcry. Especially since a report by the American intelligence services concludes that the prince had approved the operation, whose objective was to capture or kill the journalist.
Olaf Scholz comments:
“You can assume that nothing was left undone.”
The Gulf countries, privileged partners?
In addition to Saudi Arabia, Germany is banking on the United Arab Emirates and Qatar.
RWE announces the signature of an agreement with ADNOC. The latter will deliver LNG to Germany by the end of December. While volumes are still low, this agreement is an important first step. It is a symbol of a politically significant agreement.
Following the announcement of this agreement, Olaf Scholz states:
“We need to make sure that LNG production around the world is advanced to the point where it can meet the high demand that exists without having to draw on the production capacity that exists in Russia.”
In fact, this agreement provides for the delivery of 137,000 m3 of LNG. It will be the first cargo to be supplied to Germany via the floating terminal in Brunsbüttel. More shipments will follow in 2023.
ADNOC will also deliver ammonia to German companies such as Steag and Aurubis. Also, the UAE company will deliver some 250,000 tons of diesel per month to Hoyer.
In addition, Germany signed an agreement with Sheikh Mohammed bin Zayed al-Nahyann, President of the United Arab Emirates. This one is about strengthening energy security and industrial growth.
Finally, as part of Germany’s energy transition, Masdar is expected to develop offshore wind power in the country.
Other solutions for Germany?
To face the energy crisis, Germany is banking on floating terminals. Currently, two terminals are planned. These will be able to receive up to 12.5 billion cubic meters of LNG. This volume represents 13% of Germany’s gas consumption in 2021.
RWE, commenting on its agreement with ADNOC and the construction of floating LNG terminals, states:
“This marks an important step in building an LNG supply infrastructure in Germany and establishing a more diversified gas supply.”
At the same time, Germans demonstrated to demand the implementation of the Nord Stream 2 project. This project is to transport Russian gas to Germany. However, following Russia’s invasion of Ukraine, Berlin suspended certification of the project.
