Germany Seeks Algerian Gas Deals Amid Diversification Push

Germany is seeking to diversify its gas supply by securing long-term deals with Algeria. In Algiers, Germany's Foreign Minister Johann Wadephul said that his country needs to reduce dependence on a single supplier and wants to establish partnerships with multiple countries to ensure stable energy supplies.

The move comes as concerns grow in Germany about the level of gas storage ahead of winter. At present, Germany's gas storage is only 53% full, compared to an EU average of 65%. The country has been trying to replace Russian energy since deliveries stopped following Russia's invasion of Ukraine in 2022.

Germany has largely replaced Russian energy with Norwegian piped gas and American liquefied natural gas (LNG), but prices for LNG are usually higher and more volatile than those from long-term piped gas deals. Wadephul met with Energy Minister Mourad Adjal to discuss potential partnerships, citing successful deals between Algeria and Spain and Italy.

The German government has introduced measures to smooth out jumps in spot gas prices, including mandating that most gas storage facilities must be at least 80% full by November 1. Wadephul noted that the Middle East conflict has put further pressure on gas prices, leading to fears of a possible energy crunch this winter.