Germany's SEFE secures 10-year gas purchase deal with US' ConocoPhillips

Germany's state-owned SEFE is to purchase up to 9 Bcm of gas over the next 10 years from the US' ConocoPhillips under a new long-term gas partnership between the two companies, SEFE said Oct. 23.

In a statement, SEFE said the first gas deliveries under the new pact had already been successfully completed.

"Over the next ten years, ConocoPhillips will deliver up to 9 Bcm of gas from their European portfolio to SEFE at various trading hubs across Europe," the German company said.

SEFE Chief Commercial Officer Frederic Barnaud said the agreement was an "important milestone" in its ambition to diversify its gas portfolio. "It demonstrates our commitment to securing energy supply for Europe," Barnaud said.

ConocoPhillips has a large and growing European supply portfolio, including Norwegian gas production and LNG imports.

SEFE's European customer portfolio requires around 20 Bcm/year of gas. "This partnership is a perfect fit to balance the supply and demand of both companies," SEFE said.

Key importer

SEFE is a key German importer and was formerly a unit of Russia's Gazprom before it was nationalized by the German government after Moscow's invasion of Ukraine.

It signed a giant gas import deal with Norway's Equinor in December 2023 for the purchase of 111 TWh/year (10 Bcm/year) of gas for the 2024-2034 period.

In March this year, SEFE also signed a final sales and purchase agreement with Oman LNG for the supply of 0.4 million mt/year of LNG over 2026-29.

It follows a binding term sheet between the two agreed in August 2023 and makes SEFE the first German company to buy LNG from Oman.

The deal with Oman LNG also came after a 20-year LNG import deal with the US' Venture Global signed in June 2023 for 2.25 million mt/year of imports from the planned CP2 terminal in Louisiana.

SEFE also agreed in March to a heads of agreement to import 1 million mt/year from the planned Ruwais LNG project in the UAE from 2028.

ADNOC said the deal with SEFE reinforced an energy security pact agreed by the UAE and Germany in 2022.

Germany was hit hard in 2022 as Russian pipeline gas deliveries were gradually curtailed through the year, culminating in the suspension of supplies via Nord Stream in August 2022.

It has turned to LNG to replace lost pipeline gas, with four floating storage and regasification units currently operational and two more set to begin commercial operations by year-end.

It comes as spot LNG prices remain high. Platts, part of S&P Global Commodity Insights, assessed the Northwest European LNG marker at $12.81/MMBtu on Oct. 22.

ConocoPhillips position

ConocoPhillips, meanwhile, has also taken a number of longer-term LNG import capacity positions in Europe in recent years.

In July, it said it had booked 0.75 million mt/year of long-term LNG import capacity at the Zeebrugge terminal in Belgium starting from April 2027.

And in September 2023, ConocoPhillips agreed to book 1.5 million mt/year of LNG import capacity at Rotterdam's Gate terminal in the Netherlands for 15 years from September 2031.

Before that, in October 2022, it was announced that the US company -- alongside chemicals giant Ineos and German utility RWE -- would take long-term capacity at the planned onshore Brunsbuttel LNG terminal in Germany.

The three companies are to be the foundation customers of the terminal, which is expected to be completed by the end of 2026.

In November 2022, ConocoPhillips also agreed to two long-term agreements with QatarEnergy for the supply of up to 2 million mt/year of Qatari LNG into Brunsbuttel for a period of at least 15 years.

The LNG will be supplied on a DES basis from Qatar's major North Field East and North Field South expansion projects, in which ConocoPhillips is a partner.