Snubbed by Canada, Germany turns to Qatar
Gas deal with autocrats suggests misread by Liberals
After an energy-hungry Germany was snubbed by Canada, Berlin has instead gone all-in on a gas contract with Qatar, the small, autocratic nation currently hosting the World Cup.
This week, German firms announced a 15-year contract to buy roughly two million tonnes of LNG per year of Qatari natural gas.
The multi-billion-dollar deal comes just three months after German Chancellor Olaf Scholz made a rare official visit to Canada for the explicit goal of securing Canadian sources of liquid natural gas.
At the outset of 2022, Russia was meeting roughly 50 per cent of Germany’s natural gas needs. When the Russian invasion of Ukraine left Scholz scrambling for alternative sources, he was open about Canadian gas being his first choice.
“As Germany is moving away from Russian energy at warp speed, Canada is our partner of choice,” Scholz told a Toronto economic conference in August. “We hope that Canadian LNG will play a major role in this.”
Nevertheless, the German leader’s entreaties were met largely with disinterest from the Canadian federal government.
At a joint press conference with Scholz, Prime Minister Justin Trudeau said openly that there has “never been a strong business case” for Canadian LNG exports to Europe.
The prime minister then insisted on taking his German counterpart to Stephenville, N.L., the site of a proposed facility to make hydrogen gas from wind power. With any groundbreaking still years away — and with hydrogen still a vanishingly small piece of Germany’s energy mix — the visit didn’t appear to yield any particular German enthusiasm for Canadian hydrogen.
Germany’s contract for Qatari gas begins in 2026, meaning that tankers of Qatari gas will be sailing into German ports until at least 2041.
The scope and longevity of the contract would seem to defy Trudeau government claims that German gas demands were merely a temporary stopgap that carried no long-term opportunity for Canada.
In a press conference touting the German deal, Qatar’s minister of energy, Saad al-kaabi, boasted about the “long-term” nature of the agreement, and assured the Germans that Qatar could guarantee their “long-term energy security.”
On Thursday, Jonathan Wilkinson, the federal energy minister, told the House of Commons natural resources committee there’s a three-year window for Canada on natural gas, and then Europe will begin pivoting to hydrogen, “which is something that Canada is very interested in supplying to Germany.”
While Canada currently has no LNG export facilities on its Atlantic coast, it would be more than feasible for Canada to fast-track at least a couple by 2026.
Natural Resources Canada has already received applications for five proposed Atlantic coast LNG terminals: two in Quebec and three in Nova Scotia. This includes the stalled $8-billion Goldboro LNG project, which could be completed on a particularly accelerated timeline given new plans to build the facility on a floating barge.
In recent months, the owners of Saint John LNG — a New Brunswick import terminal — have similarly raised the prospect of retrofitting their facility for export by as early as 2025. In June, the idea was publicly championed by New Brunswick Premier Blaine Higgs.
The Qatari deal comes with a fair amount of political awkwardness for Germany, given that Berlin has been particularly critical of the Gulf State’s poor record on human rights.
Qatar’s hosting of the 2022 World Cup has focused international attention on the country’s autocratic rule, its rejection of gay and women’s rights and its treatment of foreign workers that has often drawn comparisons to slavery.
Just this week, senior Qatari official Hassan al-thawadi admitted that as many as 500 migrant workers have died over the last 12 years in construction projects connected to the World Cup.
A recent poll found that 65 per cent of Germans believed that Qatar should never have been granted the World Cup, with some German bars refusing to show World Cup games due to the Gulf State’s human rights record.