Because Italy will get gassed with Algeria
To protect itself from a potential blockade of supplies from Russia, Italy is trying to increase gas purchases from Algeria. What was said during Di Maio's visit (with Eni's Descalzi) and what Algeria can really do
Yesterday, Foreign Minister Luigi Di Maio went to Algiers, the capital of Algeria, accompanied by Eni's CEO Claudio Descalzi.
REASON FOR VISIT
The reason for the visit, in fact, was energy: as said last week by Prime Minister Mario Draghi, and as reiterated today in the Senate , Italy is looking for alternative supplies of natural gas to reduce dependence on Russia. It is a very strong dependence – in 2020 Russia accounted for 43 percent of imported gas – and which exposes our country to the risk of a supply crisis should Moscow decide to stop the flows (perhaps in retaliation for sanctions). In reality, the vulnerability is European, because even at EU level the share of imports from Russia averages around 40 per cent.
THE PLAN OF ITALY
In his speech in the House last week, Draghi announced that Italy, to reduce purchases from Russia, will work to increase imports of liquefied gas by ship (he cited the United States; another supplier already consulted is Qatar ) and gas via pipes. In the latter case, he mentioned Azerbaijan (the reference infrastructure is TAP), Algeria (via TransMed) and Libya (via GreenStream).
HOW MUCH ALGERIA MATTERS TODAY
Of the countries mentioned above, the most relevant to date is Algeria. In 2020 (these are the latest figures released by the Ministry of Ecological Transition) it represented just under 23 percent of total Italian gas imports, preceded only by Russia with 43.3 percent.
The list also includes Norway (11 per cent), Qatar (10.6), Libya (6.7) and the United States (2.6).
THE VISIT OF DI MAIO
In Algiers, Di Maio and Descalzi met with Algerian Foreign Minister Ramtane Lamamra and with representatives of the state-owned energy company Sonatrach. Eni has been very present in the country since 1981 and operates in both the hydrocarbon and renewable sources sectors.
Diplomatic sources cited by Rai News let it be known that Algeria has shown its willingness to "increase gas supplies to Italy in the short, medium and long term".
WHAT ALGERIA CAN DO
Last year, due to restrictions on Russia's gas exports to Europe (which contributed to the energy price crisis), Italy saw a sharp increase in imports from Algeria: they grew by 76 per cent on an annual basis, as reported on Reuters , reaching 21 billion cubic meters, or 28 per cent of total consumption. Estimates say that in 2021 Italy imported 29 billion cubic meters from Russia.
Algeria is Spain 's main gas supplier, accounting for nearly half of its imports. It is also the third supplier of the European Union, after Russia and Norway: according to Eurostat, in 2021 it sent 34 billion cubic meters of gas to the block, 8 percent of the total imported.
At a European level, replacing Russian gas with Algerian gas would be very difficult: in 2021, Russia nevertheless sent around 130 billion cubic meters to the Union, compared to 34 in Algeria.
Beyond the numbers, Algeria has two problems: one is internal political instability, which could paralyze supplies (as is already the case in Libya, by the way); the other is the growing national demand for gas (before the pandemic, the average annual increase from 2010 to 2019 was more than 6 per cent), which reduces the quantities that can be exported.
THE MAP OF GAS PLANTS BETWEEN ALGERIA AND EUROPE
THE FUTURE PERSPECTIVES
According to Platts Analytics estimates, in 2022 Algeria will be able to supply Europe with another 7 billion cubic meters of gas mainly through the Transmed pipeline that reaches Italy. A further increase in supply could come with the expansion of Medgaz (the pipeline with Spain) and of liquefied gas plants.
THE ITALIAN STRATEGY ON ENERGY
The Italian energy strategy, given the worsening of tensions with Russia, now focuses on diversification, both of suppliers and of energy sources. The Deputy Minister of Economic Development Alessandra Todde, quoted by Corriere della Sera , said “yes to regasifiers”, that is the plants that allow the liquefied gas to be brought back into gaseous form and distributed in the network. “We must not be prejudiced and not depend on a single source”, he added; "Increasing regasification capacity is important to differentiate imports from Russia".
Rather than nuclear power, which does not release greenhouse gas emissions but produces waste, Todde invites us to develop renewable sources such as wind and solar power: "if by June 2022 we were able to authorize 60 gigawatts of new renewable plants, in the short term we would to save 15 billion cubic meters ”of gas consumption.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/italia-algeria-aumento-importazioni-gas/ on Tue, 01 Mar 2022 11:24:46 +0000.