Steinmeier's North African Tour

What's good for foreign affairs is good for business, especially in the energy sector, where Germany imports crude oil from Libya, and natural gas from Algeria.

German foreign minister Frank-Walter Steinmeier, who is on a five day tour of the Magreb countries with a delegation of business leaders, has stressed the importance of the North African region for supplying energy to the European Union, thereby reducing the bloc's dependance on oil and gas from Russian pipelines.

Bilateral ties with Algeria in natural gas

In Algeria on Thursday, Steinmeier held talks with prime minister Abdelaziz Belkhadem and energy minister Chekib Khalil, mainly focusing on energy issues. Germany and Algeria are to increase bilateral cooperation, particularly in natural gas production and supply.

The German utility giant E-ON signed a declaraton of intent with Sonatrach, the Algerian state energy company to supply liquid natural gas (LNG) that can be transported by sea.

"This deal is part of our diversification strategy. We are procuring natural gas from six countries already and are adding Algeria to list," said Dietrich Gerstein, vice-president of E-ON's natural and liquid gas division.

Gerstein spoke of the important collaboration between E-ON and Sonatrach, which now supplies 26 billion cubic meters of gas annually with a target of 85 billion cubic meters per year by 2020.

Germany currently sources its entire supply of natural gas via pipeline connections and is seeking to secure more supplies of LNG.

Algeria's rich natural resources helps to settle foreign debt

"We value Algeria as a reliable energy provider," said Steinmeier.

German firms are meanwhile hoping to secure contracts under planned Algerian infrastructure projects estimated to be worth around 80 billion dollars until 2009.

Revenues from energy sales, which are estimated at more than $50 billion for 2006, has allowed Algeria to settle its massive debt with Germany, its fourth largest creditor.

Inspite of the its rich natural resources, one-third of Algeria's population is jobless and lives in poverty, with the government pocketing huge profits from gas and oil exports.

Algeria and Libya as energy market of the future

Burocracy and inefficient administrative layers also pose obstacles to foreign firms doing business in the former French colony. Still, Hans Meier-Ewert from the African Association of German Business in Algeria sees it as market of the future.

"The Algerian economy has been growing at a rate of more than five, six, seven percent each year, continuously over the last five years, numbers that should encourage German investors," he said.

European energy concerns are keen to secure their needs from diverse sources, including Libya. "Germany is one of the biggest customers of Libyan crude. There is enormous potential in natural gas, which has remained largely unexplored. In Germany, there is so much talk about energy diversification, so it is about time that we act on it," said Reinier Zwitsersloot, head of the energy group Wintershall.

Talks on human rights and press freedoms in Tunesia

On Friday Steinmeier was in Tunesia, the third stop of his five nation tour. Tunesia, which has not been as blessed with abundant natural resources as its Algerian cousin, has focused its foreign trade on tourism and the textile industry.

Besides discussing trade matters, Steinmeier is expected to hold talks with Tunesian president Zine al Abidine Ben Ali on human rights issues and press freedoms.

Steinmeier travels to Morocco later on Friday, and Mauritania on Saturday. The tour is part of Berlin's preparations for assuming the six month presidency of the EU in January.