Italy will get more gas from Algeria, says foreign minister

  • Foreign Minister promises gas deals with other countries
  • The Algerian pipeline is currently transporting half of its capacity
  • Italy moves to replace gas with coal if needed

MILAN, Feb 28 (Reuters) – Italy’s foreign minister said a visit to Algeria on Monday to seek an increase in the country’s gas supply had yielded good results, as Europe steps up efforts to exploit alternative flows after the invasion of Ukraine by Russia.

The move comes as sweeping Western sanctions threaten to disrupt commodity flows from Russia, raising the specter of gas shortages, blackouts and price hikes. Read more

“The visit had a positive outcome,” Di Maio told Italian public television RAI after a meeting with his Algerian counterpart and energy minister.

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“Algeria will support Italy in the supply of gas, our partnership will strengthen both in the short term and in the medium and long term,” said Di Maio.

The European Union depends on Russia for more than a third of its gas, and any interruption in flows would worsen a squeeze that has already sent consumer bills soaring.

Di Maio was accompanied by the boss of the Italian energy group Eni, which has several long-term gas contracts with the Algerian gas monopoly Sonatrach.

Eni also has take-it-or-pay strategic gas contracts with Russia’s Gazprom.

Di Maio said he would travel to other countries in the coming days to seek energy deals that could help Italy “deal with the threat of this conflict sparked by (Russian President Vladimir) Putin. “.

Italy, which last week introduced measures to boost domestic gas production and storage, is seeking to diversify its supplies. Read more .

But with global gas supplies tight and liquefied natural gas (LNG) producers already producing as much as they can, there is little to compensate for the large volumes from Russia.

Algeria, which has pipelines to Spain and Italy and a large LNG terminal in Skikda, increased oil and gas production last year by 5%, although rising domestic consumption and political instability have limited exports.

“It’s a good decision and the fastest way for Italy to increase gas flows,” said Davide Tabarelli, head of energy think tank Nomisma Energia.

The Transmed gas pipeline, which today transports about 60 million cubic meters (mcm) of Algerian gas to Italy per day, has a potential daily capacity of more than 110 mcm.

On Sunday, Sonatrach’s CEO said spare capacity could be used to boost supply to Europe.

But Tabarelli said Algeria needed more investment to boost production and increase exports.

Gas represents about 40% of Italy’s electricity production and it imports more than 90% of its gas, mainly from Russia and Algeria.

On Monday, he introduced measures to limit the use of gas at power stations in emergencies and to replenish gas supplies for the upcoming winter season.

The steps include the use of coal and oil-fired power plants alongside renewable energy for the period of any emergency.

Italy, which aims to phase out coal by 2025, can count on six coal-fired power stations to feed the grid, four of which are owned by Europe’s largest utility, Enel.

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Reporting by Stephen Jewkes and Angelo Amante, additional reporting and writing by Gavin Jones Editing by Keith Weir and Tomasz Janowski

Our standards: The Thomson Reuters Trust Principles.

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