Germany inks energy security agreement with UAE

Market: Electricity, Fertilizers, Hydrogen, Natural gas, Oil products
25/09/22

Germany and the UAE on Sunday signed an "energy security and industry accelerator" agreement which includes LNG and diesel supply deals. The agreement also underlines an intent to collaborate on decarbonisation and climate action, according to UAE state news agency WAM.

Under the agreement, Abu Dhabi's state-owned Adnoc will reserve a number of LNG cargoes exclusively for German customers in 2023, WAM said without elaborating. Adnoc will also provide an LNG cargo to German utility RWE in late 2022, which will be used in the commissioning of a floating LNG import terminal at Brunsbuttel in northern Germany.

Germany is seeking to accelerate construction of LNG import facilities to wean itself off Russian gas. It does not have any import terminals in operation at the moment, but there are plans to install at least five floating storage and regasification units (FSRUs) in various locations in the country.

Today's deal also includes an agreement for Adnoc to supply 250,000 t/month of diesel to Germany throughout 2023. In addition, Abu Dhabi's state-owned Masdar will be exploring opportunities in offshore wind in the German sectors of the North and Baltic seas, which could generate up to 10GW of renewable energy production capacity by 2030, subject to the necessary German policy and regulatory requirements being met.

Germany and the UAE have also reiterated plans to look at more opportunities to collaborate across the hydrogen value chain. Adnoc has entered into a number of agreements with German customers for demonstration cargoes of low-carbon ammonia, a carrier of hydrogen. The first of these arrived in Hamburg earlier this month.

The energy security agreement comes on the back of German chancellor Olaf Scholz's visit to the Mideast Gulf this weekend. Scholz visited Saudi Arabia yesterday and will head to Qatar next. Berlin is looking to secure alternative energy sources to replace Russian supplies.

By Ieva Paldaviciute

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