Germany and UK discuss natural gas pact

Article posted

17th Nov 2022

Read time

3-5 min read


Mollie Pinnington

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The German government has unveiled that they wish to speak to the UK about a solidary pact that will allow European consumers of natural gas to bail each other out in the event of extreme shortages.

This could be mutually beneficial to both the UK and Germany. Due to the UK’s coastline, we have a bigger advantage when it comes to infrastructure for importing liquid natural gas.

Due to Brexit, there cannot be an emergency aid scheme between Berlin and London as there is with other European countries, but they can however operate outside of existing regulations. The UK gas legally left Europe however the pipelines between countries are still there.

The UK has spoken out saying they are willing to work with a number of countries to manage volatility in energy prices. They are currently looking more towards the US as they feel that there is more work the two countries could do together in relation to the global gas market.

The EU countries including Germany are facing prolonged uncertainty over gas supplies to its energy hungry industries.

Germany has indirect pipeline links with the UK and has signed SOS agreements with other EU countries but there are still a number of EU countries that refuse to sign this pact.   

If more countries sign this pact, it could avoid bidding wars when it comes to securing natural gas deals next year. When different countries are all fighting for oil and gas deals it is going to drive up wholesale market prices which could push countries further into the energy crisis that we are currently seeing.

The UK needs to save energy  

Although the UK has also been in a position to be in a supply risk the government have not done much in terms of conserving gas.

Countries across the EU have been implementing energy rationing schemes and urging households and businesses to reduce the amount of energy they consume.

This has allowed the majority of the EU to meet energy storage capacity which will get them through the winter.

Given the UK’s current position with gas prices and how this could worsen next year, EU ministers are surprised that the UK does not have a gas rationing plan in place to urge consumers to use less gas throughout the winter to reduce gas demand.        

Why would this benefit the UK?

This would benefit the UK as it balances out the global market as when EU gas prices rise so do UK prices

The UK have very little storage capacity So If we have an interrupted supply or could not win gas deals to cope with demand, then the country is going to struggle.

The UK is to sign a new LNG deal with Us, this would improve our gas situation as we would have a constant supply income. 


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