With the energy prices beginning to ease, Germany has unexpectedly witnessed a slowed inflation in November after months of increases, as the country also signed a huge gas deal with Qatar.
The latest agreement comes just over two months after Germany inked a similar 137,000 cubic metres LNG (liquefied natural gas) deal with the UAE during Chancellor Olaf Scholz’s visit to the Gulf State in September.
Germany will get the LNG from the UAE from the end of this year. However, the consignments from Qatar – two million tonnes annually – will be shipped from 2026 for a period of 15 years.
In his reaction, Scholz described the LNG deal on Tuesday as a “building block” towards his country’s energy security and a sign that Berlin had many different countries to tap for supplies as the country wants to end its dependence on Russia after the Ukraine war.
As far as the inflation rate in Europe’s top economy is concerned, it fell back to 10 percent this month, federal statistics agency Destatis said, after hitting a record high of 10.4 percent in October.
It is against predictions as analysts surveyed by Factset had expected an acceleration of 10.5 percent in November.
The surprise dip comes as “energy prices have eased slightly”, Destatis said, although it noted they were still 38.4 percent higher than a year earlier.
As in other countries across Europe, Germany’s recent consumer price hikes have been fuelled by soaring food and energy costs in the wake of Russia’s war in Ukraine.
The German government has unveiled a $207-billion energy fund to shield households and businesses from price shocks, as it raced to diversify supplies after Russia cut gas deliveries.
However, European Central Bank President Christine Lagarde said Monday that the Eurozone had not yet reached peak inflation.
The agreement with the German firms was announced by state-owned Qatar Energy. The gas will be sold by Qatar to a US company, ConocoPhillips, which will then deliver it to the LNG terminal in Brunsbüttel, Qatar’s energy minister said in the capital, Doha.
However, Qatar’s gas will not arrive early enough to help Germany avoid energy shortages this winter and, potentially, the winter after. At present, Germany is confident it can avoid power outages this winter but is less confident that it will have the reserves to avoid power cuts or rationing in 2023-24.
Two million tonnes of liquid gas correspond to about 30 terawatt hours (TWh) or 3 percent of annual German energy consumption. Before the Ukraine war, about 500TWh of gas were supplied from Russia alone every year.
Germany has been one of the countries which are most critical at the World Cup of Qatar’s treatment of LGBTQ people, as well as the labour conditions of workers building the football stadiums and overall human rights situation. But the economics minister Robert Habeck, a Green party member, has also said that, faced with a need to wean itself off Russian gas supplies, Germany has to take its energy from a variety of sources.
Floating gas terminals
Earlier this month. Germany opened the country’s first floating LNG facility as Europe grapples with the energy shortage and seeks an alternative to pipeline fuel from Russia after President Putin went for invading Ukraine, triggering a strong response from the West.
Located at the northern port of Wilhelmshaven, which comprises storage and regasification unit (FSRU) ship, which is expected to be permanently stationed there.
The quay is the first in Germany to be adapted to accommodate a floating LNG terminal that allows ships to deliver gas in liquid form with the Norwegian vessel Höegh Esperanza expected to moor at the quay in December.
Meanwhile, the terminal at Wilhelmshaven, and another at Brunsbüttel, are expected to be operational early next year.
The third and fourth FSRUs are to be opened at the ports of Stade and Lubmin, and are expected to be operational by the end of 2023. The fifth will be in Wilhelmshaven and is due to be up and running by the fourth quarter of next year.
In addition, a private special ship is planned for Lubmin with an annual capacity of 4.5bn m3 a year, to be ready from the end of 2022, according to the economics ministry.