Qatar Emerges as a Rapid Alternative to Russia...Putin Takes a Step Back

독일 이어 프랑스·이탈리아도 구매협상…푸틴, 유로화 계속 받기로

[Asia Economy Reporters Byunghee Park and Hyunwoo Lee] Qatar is emerging as a new gas supplier to Europe, replacing Russia.

The Wall Street Journal (WSJ) reported on the 30th (local time) that countries including Germany, which has already announced a long-term energy agreement with Qatar, as well as France, Belgium, and Italy, are negotiating long-term liquefied natural gas (LNG) purchase agreements with Qatar.

Qatar, the world's second-largest gas exporter, has mainly exported LNG to Asian countries such as Korea, China, and Japan over the past 20 years. Qatar had long sought to enter the European market, but its efforts were blocked due to Russia's closer proximity to Europe. However, following the invasion of Ukraine, Europe has sought to stop importing Russian gas, creating an opportunity for Qatar.

Qatar currently aims to increase gas production by 40% through a $28.7 billion investment. Once the investment is completed, Qatar's annual gas production is expected to expand to 33 million tons by 2026, which is anticipated to sufficiently meet Europe's gas demand. Europe imported 13.7 million tons of Russian gas last year. Besides Qatar, Europe is also negotiating gas purchases with the United States, Angola, Algeria, and Libya.

Vladimir Putin, President of Russia [Photo by AP Yonhap News]

The conflict between Russia and Europe over gas payment methods has temporarily eased as Russian President Vladimir Putin made a concession. In a call with German Chancellor Olaf Scholz on the same day, President Putin said that Russia would continue to receive gas payments in euros. This reversed his position just one week after announcing on the 23rd that Russia would only accept payments in its own ruble currency, not euros or dollars, when selling natural gas to unfriendly countries including Europe.

At the time, analysts suggested that Russia demanded ruble payments to defend against the ruble's depreciation. However, the energy ministers of the Group of Seven (G7) rejected Russia's ruble payment demand at a meeting on the 28th, showing a confrontational stance toward Russia. The reason for Russia's retreat is interpreted as the rapidly increasing share of U.S.-produced LNG in the European natural gas market.

According to energy specialist media OilPrice.com, the share of U.S.-produced LNG in the European natural gas market surged from 7% at the end of last year to 32% last month. Following France and the United Kingdom, Poland and Eastern European countries have also announced plans to increase their imports of U.S.-produced LNG.

Separately, Germany and Austria have entered the first stage of emergency response, the 'early warning stage,' in preparation for a potential cutoff of Russian gas supplies. This measure involves a joint public-private team monitoring the gas supply status and, if supply shortages worsen, suspending gas supply to the industrial sector.

This content was produced with the assistance of AI translation services.