German utility RWE has signed a deal with Abu Dhabi National Oil Company (ADNOC) to deliver liquefied natural gas to Europe's largest economy by the end of December, RWE announced on Sunday per Reuters.
“The deal, which includes a memorandum of understanding for multi-year supplies of LNG, came on the second day of a two-day trip to the Gulf region by Scholz,” adds the news.
Additionally, German Chancellor Scholz In Doha stated that he talked with the Emir about LNG-deliveries. “We want to achieve further progress.”
Key quotes
Though the initial amount to be delivered is relatively small, it's a politically significant deal to shore up supplies of gas from outside of Russia as Chancellor Olaf Scholz seeks to deepen ties with the Gulf and find alternative energy sources.
Germany's two new planned floating LNG terminals will eventually be able to receive up to 12.5 billion cubic meters of LNG a year, equivalent to about 13% of the country's gas consumption in 2021, according to data from research firm Enerdata.
German officials hope an array of deals, like the one struck with Abu Dhabi for LNG, will help take the edge off skyrocketing energy prices.
Meanwhile, frustrated Germans protested on Sunday, calling to put into service the halted Nord Stream 2 pipeline project that was designed to transport fuel from Russia to Germany but was put on ice after the war in Ukraine broke out.
Market implications
The news may offer a sigh of relief to traders after Friday’s slump to the fresh multi-year low. The market reaction, however, is yet to be witnessed during the initial hours of Asian session on Monday.
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