Germany’s state-owned gas company is looking to expand ahead of privatization

Securing Energy for Europe, or SEFE, is trying to build a stronger supply base ahead of its privatisation, planned to take place before 2030.

SEFE is the entity that the German government created after the nationalization of Gazprom’s German business shortly after Russia invaded Ukraine in 2022.

For most of that year, Europe’s biggest consumer of Russian gas struggled to secure sufficient supplies and ended up with SEFE entering into a long-term LNG supply agreement with another Russian company, Novatek, to be supplied from the Yamal LNG facility.

At the end of last year, SEFE also signed a large, long-term contract with Norway’s Equinor. Worth about $55 billion, the deal would see Equinor supply the German state-owned company with 10 billion cubic meters of natural gas annually from 2024 to 2034. There is also an option for a further five years of supply.

Another LNG deal followed this year, this time with Emirates Adnoc. This is for 1 million tons of liquefied natural gas, delivered annually over a period of 15 years. LNG deliveries will be made from the Adnoc Ruwais LNG project, which is currently under development in Al Ruwais Industrial City, Abu Dhabi.

The definitive LNG deal is conditional on a final investment decision on the project, including regulatory approvals, and the negotiation of a definitive sale and purchase agreement between the two companies, SEFE said at the time.

The Ruwais LNG project is expected to be the first LNG export facility in the Middle East and North Africa (MENA) region to operate on clean energy, making it one of the lowest cost LNG plants in the world. This could have been an important factor in SEFE’s decision on this deal, given that the German government prioritizes climate change over everything else.

By Irina Slav for Oilprice.com

More top reads from Oilprice.com