Italy clinches gas deal with Algeria to temper Russian reliance & More News Here

Italian Prime Minister Mario Draghi speaks throughout a joint press convention with Spanish Prime Minister Pedro Sanchez, Portuguese Prime Minister Antonio Costa, and Greek Prime Minister Kyriakos Mitsotakis through videolink, amid Russia’s invasion of Ukraine, at Villa Madama in Rome, Italy, March 18, 2022. REUTERS/Guglielmo Mangiapane/File Photo

ROME, April 11 (Reuters) – Italy clinched an settlement on Monday to ramp up gas imports from Algeria by round 40% in its first main deal to discover different provides following Russia’s invasion of Ukraine.

In a go to to Algeria, Italian Prime Minister Mario Draghi stated agreements reached had been a major step in Italy’s drive to reduce its reliance on Russian gas.

“Others will follow,” he advised reporters in Algiers following a gathering with Algerian President Abdelmadjid Tebboune.

Italy, which sources about 40% of its gas imports from Russia, has been scrambling to diversify its vitality provide combine because the battle in Ukraine escalates.

Ministers have tapped quite a few nations like Congo, Angola, Azerbaijan and Qatar to discover capability to try to change the 29 billion cubic metres Italy receives from Russia.

Italy is just not the one nation searching for different provides. The European Commission has proposed Europe reduce imports of Russian gas by two-thirds this yr and part them out by 2027.

Draghi has beforehand stated whereas changing 30-40% of provides from Russia could possibly be accomplished instantly, it will be a lot tougher to change the remainder.

In an announcement, Italian vitality group Eni (ENI.MI) stated it had agreed with Algeria’s Sonatrach to steadily increase flows within the Transmed pipeline beginning this yr and attain 9 bcm of additional gas per yr by 2023-24.

Ecological Transition Minister Roberto Cingolani advised Italian TV 3 bcm of that might come on line instantly.

In a separate assertion, Sonatrach stated it had signed a deal however gave no particulars on volumes.

Algeria is Italy’s second-biggest gas provider. The Transmed pipeline has a each day capability of greater than 110 million cubic metres however presently transports solely round 60 mcm.

Rising home consumption, under-investment and political instability, together with the closure of a pipeline to Spain over a dispute with Morocco, have capped Algerian exports.

But final yr its gas export to Italy rose 76% to 21.2 billion cubic metres and on Monday each day flows exceeded these from Russia.

EUROPEAN BRIDGEHEAD

With certainly one of Europe’s largest gas transport networks, Italy is seen as a future bridgehead into Europe for gas – and inexperienced hydrogen – produced in North Africa and past.

Draghi stated Italy was additionally prepared to work with Algeria to develop renewable vitality and inexperienced hydrogen.

The Russian invasion has triggered sweeping Western sanctions that threaten to disrupt vitality flows, elevating the spectre of gas shortages.

Cingolani stated final week that Italy anticipated to get an additional 10 bcm of additional gas from pipelines from Algeria, Libya and Azerbaijan this yr.

Besides boosting its pipeline capability, Italy can be eager to improve liquefied pure gas imports from markets like Qatar, the United States and Mozambique.

Rome has stated Italy’s three present LNG terminals could possibly be used to the complete to provide 4-5 bcm of additional gas whereas two new floating storage and regasification models might deliver round 10 bcm of additional provide within the medium time period.

Reporting by Gavin Jones, Angelo Amante and Stephen Jewkes; Editing by Bernard Orr

Our Standards: The Thomson Reuters Trust Principles.

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