UAE, Germany sign deal to accelerate projects in energy security, decarbonisation and climate action

The UAE agreed Sunday an 'energy security' deal with Germany to supply liquefied natural gas and diesel as Berlin searches for new power sources to replace Russian supplies.

Emirati industry minister Sultan Ahmed Al Jaber called it a 'landmark new agreement' that reinforces the rapidly growing energy partnership between the UAE and Germany, at a signing ceremony on Sunday.

The UAE President, His Highness Sheikh Mohamed bin Zayed, and German Chancellor, Olaf Scholz, have witnessed the signing of a new Energy Security and Industry Accelerator (ESIA) Agreement that will accelerate projects of joint interest between both countries in energy security, decarbonisation and climate action.

The agreement was signed by Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology, UAE Climate Special Envoy, and Managing Director and Group CEO of the Abu Dhabi National Oil Company (Adnoc); and Dr Franziska Brantner, Parliamentary State Secretary at the Federal Ministry for Economic Affairs and Climate Action.

Scholz was on a visit to the UAE as part of a Gulf tour that also includes stops in Saudi Arabia and Qatar.

He met with Emirati President Sheikh Mohamed bin Zayed Al Nahyan, who said on Twitter afterwards they had discussed “further opportunities for cooperation in areas including energy security, emissions reduction and climate action”.

The German leader said he “welcomed” the “energy security” agreement, according to Wam.

As part of the deal, the UAE will provide “an LNG cargo for delivery in late 2022, to be used in the commissioning of Germany’s floating LNG import terminal at Brunsbuettel”, a North Sea port, the Wam added.

The UAE state oil company Adnoc completed its first ever direct diesel delivery to Germany earlier this month, and will “supply up to 250,000 tonnes of diesel per month in 2023”, it said.

“Adnoc has reserved a number of further LNG cargos exclusively for German customers in 2023,” it said.

As part of the agreement, Adnoc has entered into an agreement with RWE AG (RWE), with Adnoc providing liquefied natural gas (LNG) to cargo for delivery in late 2022, to be used in the commissioning of Germany’s floating LNG import terminal at Brunsbüttel.

In addition, Adnoc has reserved a number of further LNG cargos exclusively for German customers in 2023.

Adnoc has also entered into a number of agreements with German customers, including Steag GmbH (Steag) and Aurubis AG (Aurubis) for demonstration cargos of low-carbon ammonia, a carrier fuel for hydrogen that can play a critical role in decarbonizing hard-to-abate industry sectors.

The first of these cargoes arrived in Hamburg earlier this month. Under the proposed ESIA, both countries anticipate to explore further opportunities to accelerate growth and collaboration across the hydrogen value chain.

Furthermore, Masdar will be actively exploring opportunities in the offshore wind markets in the North Sea and Baltic Sea in Germany that could generate up to 10GW of renewable energy production capacity by 2030.

Finally, it was announced that Adnoc had completed the UAE’s first ever direct diesel delivery to Germany in September 2022, and has agreed the terms with Wilhelm Hoyer GmbH & Co. KG (Hoyer) to supply up to 250,000 tons of diesel per month in 2023.

"I welcome the signing of the joint declaration of intent on the Energy Security and Industry Accelerator - ESIA. Through ESIA, we enable the swift implementation of strategic lighthouse projects on the focus areas of renewable energies, hydrogen, LNG and climate action," said Chancellor Olaf Scholz.

Dr Sultan Al Jaber said: "As we embrace the energy transition, Adnoc is fully committed to accelerate and invest in projects of energy security, decarbonization and climate action as we continue to be a responsible and reliable provider and trusted exporter of low-carbon energy."

Robert Habeck, vice chancellor and federal minister for economic affairs and climate action, said: "We look forward to closely collaborate on offshore wind, other renewables and hydrogen in the UAE and in Germany."

The agreement signing ceremony was attended by a number of ministers, senior officials and members of the delegation accompanying the German Chancellor.

Sunday was the second and final day of Scholz’s Gulf tour, which he hoped would seal new energy deals to replace Russian supplies and mitigate the energy crisis resulting from Moscow’s invasion of Ukraine.

On Saturday, he met in Jeddah with Saudi Crown Prince Mohammed bin Salman, and on Sunday afternoon he arrived in gas-rich Qatar to hold talks with Emir Sheikh Tamim bin Hamad Al Thani.

Scholz’s stop in the UAE included a tour of an environmental project at a mangrove park with Emirati climate change minister Mariam Almheiri.

Almheiri said discussions on Sunday would, in addition to energy security, cover “climate action and economic growth”.

“The UAE believes all three pillars must go hand and hand. We cannot look at one or two of these pillars separately,” she said.

She also reiterated Abu Dhabi’s insistence on “a just transition” away from fossil fuels.

Both the UAE and Saudi Arabia have been leading critics of what they describe as “unrealistic” transition models they say have contributed to the current energy crunch.

Scholz told reporters in Abu Dhabi that his country had “made progress on a whole series of projects here in terms of the production and purchase of diesel and gas”, while adding it was determined to avoid energy dependence on Russia in the future.

“The fact that we are dependent on one supplier and also dependent on its decisions will certainly not happen to us again,” he said.

“With the investments that we are now making in Germany, and that will become reality bit by bit next year, we will indeed have an infrastructure for gas imports for Germany, such that we are no longer directly dependent on the specific supplier at the other end of the pipeline, as we are with a pipeline connection.”

His visit to Qatar comes one day after France’s TotalEnergies signed a new $1.5 billion deal to help expand Doha’s natural gas production.

Scholz said such projects were “important”.

“We have to ensure that the production of liquefied gas in the world is advanced to such an extent that the high demand that exists can be met — without having to fall back on the production capacities in Russia that have been used so far,” he said.

— With inputs from Wam, AFP

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