Italy signs deal with Algeria to increase gas imports

Italian Prime Minister Mario Draghi says agreement is a significant step in Italy’s drive to reduce its dependency on Russian energy imports.

Italy and Algeria have signed agreements to strengthen energy ties and increase the north African state’s energy exports to Italy.

Italian Prime Minister Mario Draghi announced the deals in Algeria on Monday, adding that they were a significant step in Italy’s drive to reduce its dependency on Russian gas.

“Others will follow,” he told reporters in the capital Algiers, following a meeting with Algerian President Abdelmadjid Tebboune.

Italy, which is heavily dependent on foreign gas, bought some 29 billion cubic metres (bcm) from Russia last year, about 40 percent of its total gas imports.

Draghi said the gas deal with Algeria had been signed by the two country’s dominant energy players, Eni and Sonatrach. Details of the deal were not immediately available.

As part of a broader declaration of intent, Draghi said Italy was ready to work with Algeria to develop renewable energy and green hydrogen.

Rome and Algiers already had a contract for gas deliveries up until 2027.

Search for alternative sources

Italian ministers have tapped numerous countries to seek alternative gas supplies since Russia invaded Ukraine on February 24, including the Democratic Republic of the Congo, Angola, Azerbaijan and Qatar.

The Russian invasion has triggered sweeping Western sanctions that threaten to disrupt energy flows, raising the possibility of gas shortages.

Ecological transition minister Roberto Cingolani said last week that Italy expected to get an extra 10 bcm of gas from pipelines from Algeria, Libya and Azerbaijan this year.

Besides boosting its pipeline capacity from the south, it is keen to increase liquefied natural gas imports from markets like Qatar, the United States and Mozambique.

According to Cingolani Italy’s three current LNG terminals could be used to the full to supply four to five bcm of extra gas while two new floating storage and regasification units could bring approximately 10 bcm of extra supply in the medium term.

Draghi said last week that Italy would “follow the decisions of the European Union” on new sanctions against Russia, including a possible gas embargo.

His visit also follows a spike in tensions between Algeria and Spain, another major gas importer, after Madrid dropped a decades-long policy of neutrality over the Western Sahara and backed an autonomy plan put forward by Algeria’s archrival Morocco.

Sonatrach warned earlier this month it could increase the price of its gas sales to Spain, which make up more than 40 percent of the country’s imports.