Algeria to sell Italy gas intended for domestic use, amid anger against Spain

Algeria decided to draw on part of its national consumption to increase its exports of natural gas to Italy, according to a recent Algerie Part investigation.

Algerian authorities have “discreetly” validated a new action plan developed by Sonatrach, the country’s public gas company, to provide new quantities of natural gas to Italy from stock intended for domestic use.

Initially confirmed last week by the Secretary-General of the Algerian Ministry of Foreign Affairs, Chakib Kaid while on an official visit to Rome, Algeria is aiming to shift the bulk of its gas exports away from Spain.

Considering Europe’s current dependency on Russian gas, and Algeria’s anger towards Madrid’s recent foreign policy shift, the North African country is attempting to secure an alternative main buyer, prior to the expiration of the Algerian-Spanish agreement in 2030.

This Monday, Algeria, and Italy publicized an agreement on increasing the supply of Algerian gas, during a trip by Italian Prime Minister Mario Draghi at the invitation of the Algerian president.

Draghi announced an agreement between the Italian energy group ENI Sonatrach for the latter to supply more gas to Italy.

“Our governments have signed a statement of understanding on bilateral cooperation in the energy sector. To this is added the agreement between ENI and Sonatrach to increase gas exports to Italy,” Draghi told the press.

However, according to Algeria Part sources, “the new action plan is to take advantage of the decline in national consumption during the summer season, especially the months of July and August, to transfer these volumes of natural gas dedicated to the national market to the Italian market.”

Through this strategy, Sonatrach will be able to deliver additional quantities of natural gas beyond the 21 billion cubic meters that Algeria exports annually to Italy under the long-term contract renewed by the two countries in 2019, which won’t expire until 2030.

Italy imports 95% of the gas it consumes, and is very dependent on Russian gas, which accounts for 45% of its consumption.

Algerian gas accounts for nearly a third of Italian domestic gas consumption.

Italy imported a total of 6.4 billion cubic meters during the first quarter of 2021, an increase of 109% compared to 2020, according to the official Algerian agency APS.

The new quantities foreseen by this new gas agreement will be shipped to Italy using the available capacities of the Enrico Mattei (Transmed) pipeline, which remain unused due to the continuous decline of Algerian exports over the last 10 years.