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Italy strikes an energy deal with Algeria

Italy strikes an energy deal with Algeria
Prime Minister Draghi travelled to Algiers to sign a cooperation agreement with President Tebboune as Rome looks to shift away from Russian gas. Algeria is now poised to become Italy’s biggest gas provider, and the countries are slated to expand joint efforts in renewables and hydrogen

Italian Prime Minister Mario Draghi visited the Algerian capital on Monday to sign a new natural gas supply deal with President Abdelmadjid Tebboune. The move is part of a broader effort to replace Russian gas, which Rome – along with most Western capitals – is looking to move away from.

“Immediately after the invasion of Ukraine, I announced that Italy would move quickly to reduce its dependence on Russian gas. Today’s agreements are a significant response to this strategic objective, and others will follow,” said Mr Draghi in Algiers, adding that the government wants to defend citizens and businesses from the consequences of the conflict.

The diplomatic mission resulted in a “declaration of intent on bilateral cooperation in the energy sector,” as well as an agreement between the two nations’ main energy majors – Eni and Sonatrach – to increase gas exports to Italy. FM Di Maio had travelled to Algiers a few days after Russia invaded Ukraine, accompanied by Eni’s CEO Claudio Descalzi, to lay the foundation of today’s deal.

Algeria was already Italy’s second-biggest gas exporter, providing roughly 21 billion cubic metres (bcm) a year, whereas Russia sent 30 bcm last year. However, the Trans-Mediterranean pipeline that connects the two countries is only operating at two-thirds capacity. This gave Rome the leeway to quickly increase its Algerian imports, which can now reach full capacity at 33 bcm – amounting to over 40% of Italy’s needs – next year.

The PM thanked Foreign Minister Luigi Di Maio and the Minister to the Ecological Transition, Roberto Cingolani, along with Eni, for their commitment on the energy front. He also announced that the next Algerian-Italian summit would be held in Algiers on July 18 and 19, in a push to increase cooperation, and that President Tebboune would be coming to Rome in late May for a State visit.

Mr Draghi remarked on the health of commercial ties between Rome and Algiers, and he spoke of the privileged relationship and rich history the two Mediterranean countries share. His visit followed that of President Sergio Mattarella back in November, when a plaza in Algiers was dedicated to the famed Italian energy industrialist, Enrico Mattei, a shared symbol for Algerians and Italians alike.

The expansion of cooperation efforts announced by Mr Draghi will include Italian investment in renewable energy and hydrogen in Algeria. “We want to accelerate the energy transition and create opportunities for jobs and development,” he stated. On Monday, the European Union as a whole struck a similar deal with Egypt.

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