Mario Draghi brings strategic positions closer to Algiers in the wake of the Spanish crisis

Algeria and Italy sign energy agreement to reduce Italy's dependence on Russia

PHOTO/ Algerian Presidency via AP - Italian Prime Minister Mario Draghi has secured a deal to increase natural gas imports through a Mediterranean pipeline from Algeria, the latest push by an EU country to reduce dependence on Russian energy after its invasion of Ukraine.

Italy is making a move on the energy chessboard with the agreement reached with Algeria after his whirlwind visit to the capital of the Maghreb country. The Italian Prime Minister, Mario Draghi, has announced a strategic alliance with Algiers that involves increasing gas exports to Italy, specifically with gas volumes of up to 9 billion additional cubic metres per year through the Transamed pipeline, as agreed by the Italian energy company ENI and the Algerian state hydrocarbons company Sonatrach.

For its part, in this bilateral agreement, Italy pledges to collaborate on joint projects to develop 'renewable energy and green hydrogen', a policy developed by Algiers that could overtake Morocco as the leading country in the MENA region in the use of renewable energy. 

El primer ministro italiano, Mario Draghi (izq.), habla con el primer ministro argelino y ministro de Finanzas, Aymen Benabderrahmane (der.), durante su reunión en la capital, Argel, el 11 de abril de 2022 AFP PHOTO / PALAZZO CHIGI PRESS OFFICE / HANDOUT

The meeting between Draghi and his Algerian counterpart, President Abdelmadjid Tebboune, ended with the preliminary agreement on this energy cooperation in the midst of the gas energy crisis due to sanctions against Moscow. This situation has prompted the West to find other ways to import gas due to its widespread dependence on the Russian giant. Italy imports 90% of the gas it consumes and around 40% comes from Russia, figures that have prompted Rome to intensify its search for alternative sources in Algeria. "Immediately after the invasion of Ukraine, I announced that Italy would quickly organise itself to reduce its dependence on Russian gas," Draghi said.

Also, in a brief press conference after the meeting, the Italian prime minister said that his government "wants to defend its citizens and its companies from the consequences of the Russian-Ukrainian conflict". In doing so, he also recalled that Italy will continue with sanctions against Russia to the extent dictated by the European Union.

Planta de tratamiento de gas de Krechba PHOTO/REUTERS

However, this import of Algerian gas to Italy is nothing new: the Maghreb country has exported significant quantities of some 6.4 billion cubic metres of Algerian gas during the first quarter of 2021, 109% more than the previous year. So much so that the Italian Foreign Minister, Luigi di Maio, had already made the same trip as the prime minister weeks earlier, when he said that Italy was "committed to increasing energy supplies, especially in gas" and that Algeria "has always been a reliable supplier".

For its part, Sonatrach has said it is ready to increase these deliveries to Italy through the Transmed pipeline. Its chief executive, Toufik Hakkar, said that Europe is "the natural market of choice" for Algerian gas, but that this export will always depend on meeting the growing internal needs of Algerian politics: Western Sahara.

Sede de la empresa estatal de energía Sonatrach en Argel PHOTO/REUTERS

It is precisely this aspect that has set Italy apart from other countries in its relations with Algeria and its energy agreements. Draghi maintains its Western Sahara policy outside the recognition of Moroccan sovereignty, something that other countries such as the United States, Germany and most recently Spain, with Pedro Sánchez's official visit to Rabat last week, have done.

It is for this reason that Algeria, specifically Sonatrach, has announced that it is going to raise the price of gas to Spain, something that the Minister for Ecological Transition, Teresa Ribera, has also acknowledged. The minister is also confident that this increase will be "moderate".