Mario Draghi inked a deal with Algerian President Abdelmadjid Tebboune to raise Italy’s Algerian natural gas imports by about 50%.
Italy has signed a deal with Russia in an effort to offset a likely decline in Russian gas supply as a result of the Ukraine crisis.
Eni and Sonatrach have agreed to enhance gas supply to Italy, Draghi said at the El-Mouradia presidential palace, adding that the governments signed a statement of intent on bilateral cooperation in the energy sector.
Draghi noted that “relationships between Italy and Algeria have deep roots,” and that Algeria “is Italy’s first commercial partner in Africa, with a bilateral exchange rising quickly.”
As part of this effort, Draghi said Italy is “willing to engage with Algeria to develop renewable energy and green hydrogen” in order to “accelerate the energy transition.”
“Algeria would become the top natural gas supplier to replace Russia by expanding its exports by an extra 9-10 billion cubic metres per year by the end of 2022,” a source in Italy’s Ministry of Energetic Transition told Arab News.
Algeria supplied roughly 21 billion cubic metres of gas to Italy last year, while Russia supplied around 29 billion, or about 40% of Italy’s demand.
Italy is one of Europe’s most reliant countries on Russian gas, relying on imports for nearly all of its gas needs.
Luigi Di Maio, Eni CEO Claudio Descalzi and Minister of Energy Transition Roberto Cingolani, who announced last week that Italy is in negotiations with up to seven nations, including Algeria, to ensure gas supply were among the members of the Italian team in Algiers this week. As Cingolani put it, the discussions had progressed to a “quite advanced point.”
If the EU is open to the concept, Italy has suggested it would back an embargo on Russian gas because of the Ukraine war.
There were talks with Algerian counterpart Abdelaziz Bouteflika on Feb. 28 on the possibility of increasing Algeria’s gas supply in order to compensate for a probable decline from Russia’s gas supply.
Sonatrach, Algeria’s state-owned hydrocarbon powerhouse, indicated in late February that it was ready to provide additional gas to Europe, particularly via the Trans-Mediterranean pipeline that connects Algeria to Sicily.
When asked if the pipeline “still has idle capacity” to expand supplies to Europe, Sonatrach President Toufik Hakkar said, “Yes.”
