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May 12, 2022
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The Germans who stalled Nord Stream 2 will be taught a new word in four months – “potbelly stove”

The Germans who stalled Nord Stream 2 will be taught a new word in four months - "potbelly stove"

Photo: AP/TASS

Germany is trying to pull itself out of the swamp of stagnation into which it has climbed. The German baron Jerome von Munchausen managed to pull himself and his horse out of the quagmire with one hand, his ancestors also want to try. The main thing for them now seems to be finding an alternative to Russian gas. They are looking for her in Arab Qatar.

But at the talks in the capital of this state, Doha, the parties encountered insurmountable difficulties. For Germany, it remains above all else to reduce its carbon emissions by 88% by 2040. But Qatar does not understand this. He understands about reducing dependence on gas from the Russian Federation, but about the carbon footprint – “niht fershtein.” He does not agree to sign a contract to provide Europe with liquefied natural gas (LNG) for a period of less than 20 years. Due to these disagreements, LNG supplies from Qatar are not expected in the near future, according to Reuters sources.

Director of the Energy Development Fund Sergey Pikin believes that the dream of the Emir of Qatar Sheikh is coming true Tamima bin Hamad al-Thaniwhich has long wanted to integrate into the European market:

– Before, Europe was not particularly in a hurry to let Qatar in. And now the Europeans have cornered themselves with these alternative gas supplies. Therefore, Qatar is trying to make the most of its position. The Emir puts forward the most favorable conditions for him, realizing that Europe has no alternative. After all, there is no excess liquefied gas in the world. In fact, we are even seeing a shortage of LNG. Large-scale production facilities for its liquefaction will be created just in Qatar and the USA. At the same time, America will definitely not be able to saturate the entire European market. But the Germans do not want to completely depend on their main ally. Therefore, they will try to knock out the maximum concessions from Qatar.

But here we must understand that so far the Germans do not have the infrastructure to receive liquefied gas in sufficient quantities. Therefore, all this talk about “additional volumes from Qatar” or somewhere else is not about what will happen right now, but about what will happen in a few years. First you need to prepare the infrastructure. Of course, they will create it, but for now, buyers and suppliers are trying to put the squeeze on each other with maximum benefit for themselves.

It is planned to build two LNG terminals and lease four Floating Storage Regasification Units (FSRUs) as an interim measure with regasification units.

“SP”: – But what will happen in a few years is very difficult to say, because, for example, two years ago we did not suspect about the rapid spread across the planet COVID-19-19, and three months ago they didn’t think about a special operation in Ukraine. What would you, as an expert, advise the Germans on the issues of providing their country with energy resources?

It’s pointless to give advice here. I would not vouch for what will happen by the end of this year. Such is the strange logic of the Europeans – they still cannot understand that no sanctions will affect the strategy chosen by Russia. And due to the fact that they themselves are limited in the choice of their economic and political sanctions, the harm from them is caused, first of all, to European consumers.

In Russia, the consequences of the sanctions are not yet so clearly felt. Perhaps, in the long term, all this will somehow affect us, but for now, just like other energy suppliers, we only earn. The same Qatar receives huge superprofits by supplying gas at a high price.

The same is true for oil suppliers. Geopolitical tensions, talk of sanctions, an embargo of Russian oil make it possible for oil suppliers, such as Saudi Arabia, to make money. Raw material suppliers will earn additional billions of dollars this year. And consumers, of course, will pay for it.

“SP”: – Usually they say about European ministers “political minister”, assuming that they are not specialists at all, but political appointees who understand little about the issue entrusted to them. Thus, the Minister of Economics of Germany, Robert Habeck, studied literature, was engaged in translations, worked in the publishing industry. Then he became interested in politics, became co-chairman of the Union 90 / Greens party, was appointed Vice-Chancellor, Minister of Economy and Climate Problems.

– The current German government is completely incompetent. Okay, they are not educated, so they also do not understand anything about the issues entrusted to them. Neither the Minister of Defense understands anything about military affairs, nor the Minister of Economics understands anything about economics. I will not talk about the chancellor, it is enough for him to carry out general leadership. But the level of ministers is much lower than it was under Angela Merkel. Hence many of their problems.

“SP”: – The German government is struggling to balance any of its deals so that it “positively affects the reduction of carbon emissions.” The Germans are still dreaming of “reducing the carbon footprint”. But before now? Maybe it’s time for them to act according to the principle “they don’t cry when they take off their heads”, forget about the carbon footprint, as some have already forgotten about covid?

– If in order to reduce dependence on Russia they increase the consumption of hard coal, then what kind of reduction in the carbon footprint can we talk about. What they, and we, along with them, have been going for so long, carefully built, is collapsing.

But it is clear that this does not mean that the Europeans will close their entire green program and return to coal heating. It’s just that now they are forced – in the conditions of a sharp paradigm shift – to look for some solutions. Some of the solutions found contradict their overall strategy…

Germany annually consumes about 100 billion cubic meters of natural gas, of which more than half came and comes from Russia. Some are delivered by pipeline from the Netherlands and Norway.

And back in 2016, RWE, the largest electricity producer in Germany, made a deal with Qatar, according to which, by the end of 2023, more than a million tons of liquefied natural gas should be supplied to Northwestern Europe annually. We remind you that a ton of LNG contains a little more than a thousand cubic meters of natural gas after regasification. In those days, requests were modest – only one percent.

But Germany and Qatar still disagreed about not the LNG deal itself, but even … on the terms of the negotiations. Doha – does not want to allow Berlin to redirect gas to other regions of Europe. Germany is essentially competing with other countries for gas from Qatar. And Doha intends to specifically negotiate a provision that will restrict Berlin from redirecting gas to other parts of the European Union.

In addition, there is no understanding of the “issue price”. Qatar wants to index the price of gas the old fashioned way, linking contracts to the price of oil in Asia. The Germans would like to get attached to the newfangled Dutch virtual marketplace for the purchase and sale of natural gas Title Transfer Facility (TTF).

Most likely, the Germans will have to adopt a traditional oil-linked pricing structure to secure supplies. And this is a financial risk for the European buyer, compared to prices at the European hub. In theory. In practice, it turns out that in Europe itself, prices jump like crazy.

Of course, Europe has long-term ties with Qatar, and there is hope for the further development of these relations, and the process will continue. The Germans really want to reach a gentlemen’s agreement with the Arabs. The only question is, who needs it the most?

For example, for natural English gentlemen in Britain, electricity bills should reach 3,000 pounds sterling by autumn, which is no less than 250 thousand rubles.

10 million homeowners will not be able to afford heating this winter. Recently, the London Fire Brigade was called in after an English gentleman lit a fire in his living room to keep warm.

German Economy Minister Robert Habeck, along with officials from the German utilities RWE and Uniper, visited Qatar last March to discuss the purchase of additional volumes. But no deal was agreed upon. Tough negotiations between the Arabs and German public utilities are somewhat similar to the medieval “friendly visit” of the European crusaders, who then screamed about some kind of “holy grail”, and now they scream about the “carbon footprint”.

So the Emir of Qatar, Sheikh Tamim bin Hamad Al Thani, intends to visit Germany in the second half of May to sign a partnership agreement. However, this does not mean that long-term LNG deals will necessarily be concluded, because the parties – sellers and buyers – understand long-term partnership differently.

Incidentally, Qatar’s Sovereign Fund, QIA, has invested about $20 billion in Germany, both in Volkswagen and Deutsche Bank. But even here the Germans want to gentlemanly “help investors” in their sustainable development plan. And they will help. And if it doesn’t work out, then they can keep the investment for themselves, as was already the case with Russian money.

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