Top Italian politicians are visiting North Africa, with discussions on security, Libya – and, of course, energy supplies.
Italian Prime Minister Giorgia Meloni arrived in Algiers on January 22. She held talks with Algerian Prime Minister Aïmene Benabderrahmane and is due to meet President Abdelmadjid Tebboune today.
Meloni said energy and the two countries’ bilateral relationship was at the heart of talks. “The Mediterranean unites us,” she said, thanking Benabderrahmane “for the warm welcome and fruitful meeting”.
The Italian premiere also visited an Italian Naval ship in Algeria, saying the crew was working to “defend Italian credibility and interests every day”.
Benabderrahmane met Meloni at the airport and the two visited a memorial to the war of independence against France.
Meloni’s predecessor, Mario Draghi, visited Algeria and signed energy deals with President Abdelmadjid Tebboune in July 2022. Draghi’s visit was his last in office, he resigned shortly afterwards having lost the election to Meloni.
Algeria agreed, during the Draghi visit, to increase gas exports to Italy by 4 billion cubic metres.
Algeria is now Italy’s top source of energy imports. Italy is highly reliant on gas, for power and industry.
Doing deals
Eni CEO Claudio Descalzi has accompanied Meloni on her visit to Algeria. Descalzi has strong support from the government, not least for his insights and connections with African energy suppliers.
Descalzi said recently that Italy would have sufficient energy supplies for next winter – as long as it can increase supplies from Algeria.
Eni said today that Descalzi had signed two agreements with Sonatrach CEO Toufik Hakkar. These cover energy supplies and decarbonisation.
Meloni and Tebboune witnessed the Sonatrach-Eni deals.
The two companies plan to find ways to reduce emissions, generate renewable energy and green hydrogen, while also thinking on carbon capture.
Eni and Sonatrach will also carry out studies to “identify possible measures to improve Algeria’s energy export capacity to Europe”.
Descalzi said the deals “bear witness to our commitment to ensuring Italy’s security of supply while at the same time pursuing our decarbonisation objectives. The partnership between Italy and Algeria gets stronger today, and Algeria’s key role as one of Europe’s main energy suppliers is confirmed”.
Meloni praised Draghi’s efforts to secure energy supplies but said that he had not gone far enough. She has highlighted the importance of energy security for Italy, saying the country should aim to emerge from the crisis “stronger and more autonomous than before”.
Meloni has consciously referenced Enrico Mattei, the founder of Eni, who supported Algeria in its early years. The Italian premier visited the Mattei garden in Algiers today, which symbolises the Italy-Algeria relationship.
While Meloni is visiting Algeria, Foreign Minister Antonio Tajani is in Cairo. He met Egyptian President Abdel Fattah al-Sisi on January 22 and the two discussed “energy security, economic co-operation and stability in the Mediterranean, especially in Libya”.
© Supplied by Ed Reed / Energy VoiDescalzi visited al-Sisi on January 16. Eni discussed its plans for the energy transition and decarbonisation in Egypt. It signed a memorandum of intent to work on reducing emissions, particularly through tackling gas flaring.
Data from the European Union shows Algerian gas flows to Italy up 41% year on year in the third quarter of 2022. The North African state increased flows to the EU as a whole by only 4%, while its LNG supplies actually fell 7%.
Algeria’s supplies to Spain fell 36% year on year, as a result of the closure of the Gazoduc Maghreb Europe (GME) pipeline, via Morocco.
CIDOB researcher Francis Ghilès has said Italy is due to receive 31 bcm of gas from Algeria in 2023. Algeria is facing challenges in producing more gas, opening the path for new investments from Eni.
Ghilès noted that Spain’s relationship with Algeria had suffered because of its changed position on Western Sahara. “The crisis has cost Spain 85% of its exports to Algeria,” he said.
He went on to note that Sonatrach has inserted clauses allowing it to change the currency in which it receives payment for gas. Algeria has also moved to prevent countries from reselling its gas to others, Ghilès said.
Updated at 1:46 pm with Eni-Sonatrach deals.