Algeria’s President Abdelmadjid Tebboune and Italy’s Prime Minister Mario Draghi have witnessed the signing of a significant deal that is expected to see gas supplied from North Africa to Europe.
Europe is scouting the globe hunting for additional sources of gas to eventually replace the 180 billion cubic metres the continent imports from Russia.
Some 40% of Italy’s gas demand is currently met by Russian supplies.
Algeria already supplies gas to Spain and Italy via pipelines traversing the Mediterranean Sea, although Algiers refuses to export gas to the Iberian Peninsula via the Maghreb pipeline due to political tensions with neighbouring Morocco.
In Algiers on Monday evening, Sonatrach president Toufik Hakkar and Eni chief executive Claudio Descalzi signed an agreement that, starting from this autumn, will increase the volume of gas imported through the TransMed/Enrico Mattei pipeline under a long-term supply contract currently in place with Sonatrach.
This agreement will exploit the pipeline’s available transportation capacities to ensure greater supply flexibility, Eni said, gradually providing increasing volumes of gas up to a maximum additional throughput of 9 billion cubic metres per annum in 2023-2024.
Reuters reported that Italy’s Ecological Transition Minister Roberto Cingolani as saying some 3 Bcm of that extra volume would come on line immediately.
The Transmed pipeline has a capacity of about 110 million cubic metres per day, but only 60 MMcmd is currently flowing through the line, reported Reuters.
The most recently available data from the Italian government — covering February this year — saw the pipeline supply about 1.78 Bcm, about one-third of Italy’s total gas imports.
Italy’s total gas consumption in 2021 amounted to 76.1 Bcm, of which the TransMed system supplied 21.1 Bcm.
The signing took place as the Algiers and Rome governments also agreed to strengthen co-operation in the energy sphere.
Draghi said: “Immediately after the invasion of Ukraine, I announced that Italy would move fast to reduce its dependence on Russian gas. Today’s agreements are a first significant response to this strategic objective, and others will follow.
“The government is working to defend citizens and businesses against the consequences of the conflict”, added Italy’s prime minister.
The agreement between Eni and Sonatrach, whose foundations were laid during the previous visit of Descalzi and Italy’s foreign minister to Algiers on 28 February, was “defined and signed in record time following intense negotiations between the top management of the two companies”, Eni said.
On 4 April, senior executives from Eni and Sonatrach — together with top government officials — met in Algiers to finalise details of this gas export deal.
The new gas volumes covered by the agreement will come from fast-tracking the exploitation of Algerian projects.
One of these developments includes gas located in Eni's Berkine South contract area, where the first of discoveries will be tied back to the Italian player's existing MLE-CAFC assets in Block 405b and is due on stream this July.
The 1085-kilometre TransMed/Enrico Mattel pipeline runs from the giant Hassi R’Mel field in the Sahara Desert to Sicily via Tunisia.
Descalzi said: “Today is a special day for the relations between Italy and Algeria, in particular for Eni and Sonatrach.”
“Thanks to the close, long-standing collaboration between the two companies, it was possible in a short time and with an enormous joint effort to sign this important agreement that further consolidates the partnership between the two companies.”
Read more
- Eni and Sonatrach discover oil in Algeria’s Berkine North basin
- Eni can tap 14 Tcf of gas in short to medium term to help Europe plug Russia gap
- Difficult decisions ahead for EU as it recoils from Russian gas
- European Commission urges faster energy transition and shift to LNG in response to Russian gas cuts
- Eni to fast-track $1.4bn Algeria project to first oil
