Merkel Lobbies for German Gas Supplies in Algeria

Merkel Lobbies for German Gas Supplies in Algeria

By Andreas Cremer, Bloomberg, July 17, 2008

— German Chancellor Angela Merkel lobbied for gas supplies in talks with Algerian President Abdelaziz Bouteflika today during her first trip to the North African nation aimed at stepping up bilateral trade.

Merkel was accompanied on the two-day visit by a 50-member business delegation including representatives of Germany’s two biggest utilities, E.ON AG and RWE AG. Her aim was to reduce dependence on energy supplies from Russia, which provides Germany with more than 40 percent of its natural-gas imports.

Germany’s economic ties with Algeria, Africa’s largest natural-gas producer, « can be expanded hugely, » said Andreas Hergenroether, executive director of the German Trade Chambers in Algiers, which hosted a conference for Merkel’s delegation last night. « Merkel wants to broaden energy supplies; Algeria fits that bill perfectly. There’s a lot of business here. »

European leaders including Merkel have expressed concern that Russia may not be a reliable energy supplier. Oil and gas accounted for 69 percent of Germany’s 28.8 billion euros ($45.7 billion) of imports from Russia in 2007, according to Germany’s Federal Statistics Office. Gas imports from Algeria amount to no more than 1 percent of German needs, said Hergenroether.

« There is leeway to further expand » ties with Algeria, Merkel told a business audience at the German Trade Chambers, singling out energy, infrastructure, defense, services, banking and medical engineering as areas for future cooperation.

`Concrete Results’

« It’s the purpose of our visit to make this clear and, wherever possible, achieve concrete results, » Merkel said, according to an e-mailed text of her speech.

German exports to Algeria, Africa’s fourth-biggest oil supplier behind Angola, Nigeria and Libya, totaled 1.7 billion euros last year, according to the German Foreign Ministry. Europe’s biggest economy imported goods worth 1.2 billion euros, with 98 percent of those comprising oil and petrochemicals.

« Algeria owns massive foreign-currency reserves thanks to rising oil and gas prices, » Werner Ruf, a retired politics professor at Kassel University and an Africa expert, said in a phone interview. « German companies are obviously keen on winning part of the business. »

German architects KSP Engel und Zimmermann and Krebs und Kiefer International signed a contract today to build the world’s third-largest mosque near Algiers. Estimated to cost about 1 billion euros, the building will accommodate 40,000 visitors and be completed by 2014, KSP said in a statement.

German Frigates

Other contracts still requiring further talks include the sale of four German-built frigates to the Algerian navy at a cost of about 5 billion euros, a government spokeswoman said on condition she not be identified.

More than 140 German companies have branch offices in Algeria. Munich-based Linde AG, the world’s second-largest maker of industrial gases, is engaged with Sonatrach, Algeria’s state oil company, in a joint project, according to Hergenroether.

Siemens AG provides technology for Algeria’s railway, while construction company Dywidag, Germany’s biggest employer in Algeria with 2,500 workers, is building the capital city’s metro system and a purification plant.

« Products made in Germany still enjoy a great reputation » in Algeria, Hergenroether said.

That may not apply to aircraft after Merkel’s government Airbus suffered minor damage and was unable to fly her delegation back to Germany. The chancellor, who turned 54 today, was forced to hitch a ride on an Algerian government plane to Berlin to celebrate her birthday.

To contact the reporter on this story: Andreas Cremer in Berlin at [email protected]
Last Updated: July 17, 2008