Four European Countries To Receive Gas From Qatar

Qatar will be supplying its gas to Italy, the Netherlands, Germany, and France, filling the gap left by the discontinuation of Russian energy resources.

As reported by Bloomberg, it appears that Europe's energy crisis, stemming from the start of the conflict in Ukraine and a sharp reduction in Russian gas supplies in 2022, is no longer a looming threat in 2023. European nations have found a new ally to ensure a steady supply of natural gas for the upcoming winter.

According to the publication, Qatar has become Europe's new gas partner. On October 23, Italy's Eni signed a long-term deal for gas supplies with Qatar. Prior agreements have also been reached by the Netherlands, France, and Germany, with each country set to receive 3.5 million tonnes of liquefied natural gas (LNG) from the Middle Eastern nation until 2050.

In total, European countries will be receiving 27 million tonnes of LNG in the 2030s, equivalent to 3 billion cubic meters of gas or a quarter of Russia's volumes. Besides Qatar, the European Union also sources gas from the United States.

The appeal of Qatar's decade-long contracts, which competes with the US and Australia as a leading global LNG supplier, increased as Europe prioritized supply security.

At the same time, these deals raise questions about the continent's climate goals, as the European Union aims to achieve zero emissions by 2050 and advocates for the gradual phase-out of fossil fuels worldwide.

Qatar is accelerating efforts to secure clients after investing tens of billions of dollars to increase production by 64% by 2027. Its North Field East project, partnered with Eni, is planned to produce 32 million tonnes annually, while the expansion, known as North Field South, will bring in an additional 16 million tonnes per year. With the Eni contract included, Qatar has committed to producing nearly 20 million tonnes of additional LNG capacity, accounting for over 40% of the volumes.

Long-term contracts generally offer the advantage of significantly reducing the price of gas compared to buying from the market. Additionally, such agreements provide guarantees of uninterrupted fuel supply.

Previously, the European Union planned to reduce gas consumption as part of its green transition agenda. But judging by recent developments, it seems that Europeans have no intention of resuming energy trade with Russia, even after the war in Ukraine concludes.

Of course, transitioning an export system that supplied gas from Russia to Europe for decades couldn't be entirely overhauled in just a year and a half of war. Nonetheless, the EU is steadily progressing towards complete independence from Russian gas. To win the gas war instigated by the Kremlin, Europe has not only built LNG terminals and the like but also replaced Russian supplies with gas from other countries. For more insights, watch The Gaze report.