ConocoPhillips has inked a natural gas supply deal with German Uniper that would see the U.S. major supply up to 10 billion cu m of gas to the German company annually over a period of 10 years.
The deal is specifically for pipeline gas and not LNG, a spokesperson for Conoco told Reuters. However, in a press release on the news, Uniper said that "Under the agreement, ConocoPhillips will supply natural gas to Uniper in Northwest Europe while leveraging its existing piped gas and growing LNG positions."
"The agreement also supports ConocoPhillips' increasing gas flows into Europe, where significant long-term regasification capacity commitments have been made including the German LNG, Gate and Zeebrugge terminals," the spokesperson also said.
"This deal aims to enable us to sustainably strengthen the supply of gas in Germany and Europe on a long-term basis," Uniper's COO Carsten Poppinga said.
Earlier this week, Uniper warned that Germany needed to soon start to award tenders for new natural gas capacity that would replace coal plants if Europe's biggest economy is to meet its target to phase out coal in power generation by the end of the decade.
The warning comes despite an announcement by the German government earlier this year that it would tender 10 gigawatts of new natural gas-fired generation capacity that could be converted to hydrogen in the 2030s, as part of plans to ensure stable electricity supply as wind and solar power generation and installations grow.
Meanwhile, a climate think tank sounded the alarm on new LNG import capacity in Germany, arguing that demand is peaking and that capacity would end up as stranded assets. The country plans to have as much as 70.7 million tons per year of LNG import capacity by 2030, which will make it the fourth-largest LNG import capacity holder in the world.
By Irina Slav for Oilprice.com
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More