Econostrum | Economic News in the Mediterranean

Algeria to supply more gas to Italy

Written by Frédéric Dubessy on Tuesday, April 12th 2022 à 15:45 | Read 372 times

New gas agreements were signed between Algeria and Italy during a meeting between the President of the Italian Council of Ministers and the President of the Algerian Republic (photo: Algerian Presidency)
New gas agreements were signed between Algeria and Italy during a meeting between the President of the Italian Council of Ministers and the President of the Algerian Republic (photo: Algerian Presidency)
ALGERIA / ITALY. The Italian group Eni and the Algerian state-owned company Sonatrach signed a new gas agreement on Monday 11 April 2022. Supervised at the highest level and announced during a meeting between the President of the Italian Council of Ministers and the Algerian President Abdelmadjid Tebboune, this strengthening of energy cooperation between the two countries allows Rome to secure its supplies. "Our governments have signed a declaration of understanding on bilateral cooperation in the energy sector. This is complemented by the agreement between Eni and Sonatrach to increase gas exports to Italy," commented Mario Draghi.

Before the conflict, Italy imported about 95% of the gas it consumed, 40% of which came from Russia. Algeria is its second largest supplier. In 2022, Italy should receive some 10 billion cubic metres of gas from Algeria, Azerbaijan and Libya. Also present in the government delegation that went to Algiers, Roberto Cingolani, Italian Minister for Ecological Transition, revealed on 4 April 2022 that discussions were underway to increase its imports of Libyan natural gas. The objective of supply from these three countries is 20 billion cubic metres by 2024.

Towards a doubling of gas deliveries from Algeria

"After the crisis in Ukraine, Italy quickly organised itself to reduce its dependence on Russian gas," explains Mario Draghi. Luigi Di Maio, the Italian Minister of Foreign Affairs, travelled to Algiers in the first week of the invasion of Ukraine to discuss this issue. Senior Eni officials had then also travelled the same route with the same intentions. For the president of the council of ministers, this agreement is "a significant response to achieve this strategic objective.

No details were given on the extent of the new arrangements between Algeria and Italy. But the Al Arabiya channel spoke of a 50% increase in Algerian gas exports to Italy. This would be equivalent to between 9 and 10 billion cubic metres per year of additional gas.

On the other hand, Eni indicated in a press release that this agreement "will make it possible to exploit the available transport capacity of the gas pipeline to ensure greater flexibility of energy supply, and to supply progressively increasing volumes of gas from 2022, up to 9 billion cubic metres of gas per year in 2023-21. The Italian group is talking about Transmed, which links the Algerian fields to Sicily via Tunisia and is also called the Enrico Mattei gas pipeline (named after the first CEO of Eni).

​Cooperation in renewable energy

Today, Algeria exports a maximum of 22 billion cubic metres per year via this trans-Mediterranean pipeline, although it has a capacity of 32 billion. On 27 February 2022, Toufik Hakkar, CEO of Sonatrach, responded to requests from the European Union, recalling that his company "is a reliable supplier of gas to the European market and is prepared to support its long-term partners in case of difficult situations". He said that Transmed could be used to transport additional quantities.

In addition to the gas contract, the two countries also committed to cooperation in renewable energy by initialling a memorandum of understanding in the energy field. This theme was first discussed in September 2021 in Algiers during a meeting between the Algerian Minister for Energy Transition and Renewable Energies, Ben Atou Ziane, and the Italian Ambassador to Algeria, Giovanni Pugliese.

The Algerian government launched, at the beginning of February 2021, a "National Programme for the Development of New and Renewable Energies and Energy Efficiency" including "large-scale solar projects, the development of geothermal energy and energy recovery from waste as well as the establishment of the national laboratory for testing and monitoring energy performance", as underlined in a press release from the Algerian Ministry of the Environment.

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