​Large European companies are in no hurry to replace natural gas with cleaner energy sources in the near future, despite the climate goals enshrined in regulatory acts. Last month, three major energy companies signed 27-year agreements with Qatar to purchase liquefied natural gas (LNG). In fact, we see Russia gradually being displaced by other major gas suppliers. But these long-term deals, which tie Europe to gas from Qatar or the US for decades, could prevent the EU from meeting its goals of becoming climate neutral by 2050.

Three large contracts for the supply of gas to Europe

Italy’s Eni SpA has just signed a 27-year deal with QatarEnergy to buy liquefied natural gas (LNG), Bloomberg reports. Starting in 2026, the joint venture between QatarEnergy and Eni will supply 1.5 billion cubic meters (bcm) of LNG annually to a floating import terminal in Piombino, Italy.

This is the third 27-year contract Qatar has signed this month with a European company. The other two are TotalEnergies SE and Shell Plc.

Bloomberg notes that the deal with Shell Plc was signed two days after the European Union said it would push for a phase-out of most fossil fuels well before 2050. A similar agreement was signed with France a week earlier by TotalEnergies SE.

According to the agreement with Shell, starting in 2026, QatarEnergy will supply up to 3.5 million tons of liquefied natural gas per year to the Rotterdam Gate terminal for 27 years. The same will reach France.

The deals come after Qatar invested billions of dollars to boost production by 64% by 2027.

The interests of energy companies do not take into account the forecasts of politicians

“Energy companies seem to be betting that Europe will need more gas than politicians predict,” said Christian Egenhofer, a researcher at the Center for European Policy Studies, according to Bloomberg.

The transition to cleaner alternatives is proving difficult as Russian gas imports are being replaced by liquefied natural gas from Qatar or the US.

EU governments are trying to prioritize renewable energy, especially after Russia’s invasion of Ukraine, but high borrowing costs and uncertainty about the commercial viability of some technologies have stalled investment and raised questions about the affordability of Europe’s renewable energy targets, Bloomberg notes.

While there are no legal restrictions on private companies signing long-term deals, some EU diplomats are concerned that such deals show that the big players in the energy market see a bright future for gas.

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