European Central Bank (ECB) President Mario Draghi speaks during a press conference at the ECB headquarters in Frankfurt, Germany. Reuters
Italy buys the vast majority of its natural gas from abroad, with more than 40% of these imports coming from Russia.
But the war in Ukraine has sparked European pressure for sanctions against Moscow, including measures to drastically reduce such purchases.
Rome hopes that its second supplier, Algeria, can increase its production via an undersea pipeline in order to offer alternatives.
The Italian prime minister was invited by President Abdelmadjid Tebboune to discuss “strengthening cooperative relations between the two countries”, Tebboune’s office said, without giving further details.
The official APS news agency said the visit comes as the two countries are enjoying “increasingly close cooperation in all areas, but particularly with regard to gas”.
Italy is Algeria’s biggest gas customer, importing some 6.4 billion cubic meters of Algerian gas in the first quarter of 2021, a 109% increase on the previous year.
The war in Ukraine and the ensuing Western sanctions campaign prompted Italy, one of Russia’s most dependent gas importers in Europe, to redouble its efforts to find alternative sources.
Draghi arrived in Algiers after Foreign Minister Luigi Di Maio made the same trip in late February when he confirmed that Italy was “committed to increasing energy supplies, especially gas”, including from of Algeria, which he said had “always been a reliable supplier”. .
The Algerian national hydrocarbon company Sonatrach then declared itself ready to increase its deliveries, in particular via the Transmed pipeline linking Algeria to Italy.
Its CEO, Toufik Hakkar, said Europe is the “natural market of choice” for Algerian gas, which accounts for around 11% of Europe’s gas imports.
But he added that any increase in exports would depend first on meeting Algeria’s ever-growing domestic needs.
Sonatrach and Italian energy giant ENI jointly operate the Transmed pipeline, which has a capacity of around 32 billion cubic meters per year.
Algeria’s former energy minister Abdelmajid Attar told AFP that “Algeria exports a maximum of 22 billion cubic meters (per year) through the Transmed gas pipeline”, leaving some 10 billion of unused capacity.
Attar, also a former CEO of Sonatrach, said Algeria’s liquefaction facilities, which allow gas to be exported by ship, are “used at only 50-60% of their capacity”.
But he noted that in the short term, Algeria could increase its gas exports to the EU by up to three billion cubic meters per year, which means “it cannot compensate on its own for a decline in Russian gas supplies”.
However, “within four or five years, Algeria could send larger quantities” to Italy, he added.
Algeria plans to invest some $40 billion in oil and gas exploration, production and refining between 2022 and 2026.
Rome and Algiers have a gas delivery contract until 2027.
Draghi said last week that Italy would “follow European Union decisions” on further 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 abandoned a decades-long policy of neutrality on Western Sahara and backed a proposed autonomy plan. by Algeria’s great rival, Morocco.
Sonatrach warned earlier this month that it could raise the price of its gas sales to Spain, which account for more than 40% of the country’s imports.