(Re-)Energising Europe: Tally of Italy

AFP/RYAD KRAMDI - Fotografía de archivo, soldados argelinos hacen guardia en el complejo de gas de Tiguentourine, en In Amenas, a unos 1.600 kilómetros al sureste de la capital
AFP/RYAD KRAMDI - File photo, Algerian soldiers stand guard at the Tiguentourine gas complex in In Amenas, some 1,600 kilometres southeast of the capital

Following Enrico Mattei’s vision 

Giorgia Meloni’s visit last January to Algeria, Italy’s natural extension on the African continent, opened what may be a new chapter. Italian PM paid homage to Enrico Mattei’s monument. Indeed, in comparison with predatory impulses – new and old – towards Africa, Meloni chose a Republican hero who built an alternative model to neo-colonialism, based on cooperation in the wider Mediterranean. It was a model capable of fuelling a season of peace and stability, in the context of the Cold War. 

The stability of energy supplies made the industrialisation of Italy, a country still rural and devastated by the lost war (the GDP per capita had fallen below pre-unification levels) possible, and so the spread of prosperity. Not only that, from the perspective of mutuality, the purchase of gas from the coastal countries led to the stabilisation of those ruling classes that had won the struggle for independence. 

That was the first political step to relaunch Italian diplomatic action, which could produce many positive effects, but there are points to be clarified. The context has changed profoundly. Post-WWII, Italy was an emerging regional power. Now, Italy must maintain the degree of development and prosperity it has acquired while interrupting commercial relationships with Russia, previously its major (energy) partner.  

Consequently, the ‘Mattei Plan’ starts from the involvement and synergy of national companies such as ENI, ENEL, Snam and Terna and aims at some targets: the transformation of the country into a hub for oil and gas through infrastructure, the complete abandonment of Russian gas and, therefore, its replacement with both LNG and natural gas from Africa.

How to Govern the Scarcity Era? 

Italy is managing the phase-out from Russian natural gas: 100 per cent by 2024-2025, at least 80 per cent by 2023, warns ENI’s CEO Claudio Descalzi – he predicted the most complex period in the winter of 2023-2024. 

As professor Anis H. Bajrektarevic noted in his luminary “Nuclear Commerce” book: “In an ever evolving and expanding world, there is a constant quest for both more energy and less external energy dependency. With the fossil fuels bound industry setting an alarming trend of negative ecological footprint, there is a clear and urgent must to predict and instruct on alternatives.” And indeed, after the Russian intervention in Ukraine, Europe and Italy had to change strategies increasing imports of liquefied natural gas by over 60% in 2022, explained International Energy Agency (IEA). Because of this, Liquefied Natural Gas (LNG) has reached colossal demands and hence a high price peaks, which are set to remain steadily elevated in the coming years. It is also since the supply to Europe (due to boycott of Russia) will stay weak, and demands strong (due to workings of the global South markets). 

To process the new LNG, two new regasification plants are planned, in addition to those already present (Panigaglia, Leghorn, Rovigo): one in Piombino, which has a total processing capacity of 5 billion cubic metres per year (equal to 7% of Italian requirements), built by Snam – the company aims to become the European leader in LNG – and the other in Ravenna (ready in the third quarter of 2024). The Italian strategy is certainly on track and the two LNG terminals will increase the country’s energetic flexibility; so, LNG imports will be around 40% in 2026 when were just 20% in 2021. 

After the cut in Russian supplies of natural gas, Italy can count in the meantime on supplies from Azerbaijan via Türkiye thanks to the vituperate TAP (worth around 10% per year) and the Transmed, better known as the ‘Mattei pipeline’, which connects Algeria to Italy via Cape Bon in Tunisia and has a capacity of around 32 billion cubic metres of gas.

ENI and ENEL in Africa 

ENI and ENEL, two companies with public government participation, have always guaranteed strategic continuity in relations with African countries and are the key to giving substance to the ‘Mattei Plan’.  

ENI has been present in Africa since the mid-1950s and has projects in as many as 14 countries. It is a key player in the diversification of gas supplies, first and foremost thanks to its long-time relationship with Algeria’s Sonatrach. Since the first half of 2022, Algeria has become the first gas supplier, ousting Russia, and already in July of that year, it provided a further 4 billion of gas. ENI is the most important company in the country: in 2021 it produced around 20 million barrels of oil and condensate as well as 1.7 billion cubic metres of natural gas. Proof of ENI’s dynamic commitment in Algeria is the start-up in October 2022 of two new fields in the Berkine South basin. 

There is not only Algeria. Another country with which ENI has an established relationship is Egypt, where ENI has been present since 1954 through its subsidiary IEOC. In 2022, ENI produced almost 60% of the gas produced in Egypt. A central infrastructure is the Damietta plant (in operation since 2005), which, after resuming production in 2021, reached its 500th LNG cargo, touching approximately 4 billion € liquefied gas exported in 2022, in large part to Europe. Furthermore, thanks to the agreements with Egas, ENI will finalise exploration campaigns together with those in newly acquired areas such as the Nile Delta. 

ENI has also promoted new investments and projects intending to diversify gas source countries. A significant case in point is ‘Coral South’, a floating natural gas liquefaction plant with a capacity of 3.4 million tonnes of LNG, fed by 6 subsea wells, in the Rovuma field in Mozambique, from which the first LNG cargoes left as early as November 2022. The project is a source of new jobs, estimated at around 800 during the operational period. 

In Africa, ENEL’s commitment, via ‘ENEL Green Power’, focuses on renewable energy sources. There are already active plants such as those in Morocco (three for a capacity of 210 MG) or those in South Africa where there is both wind and solar power; in other countries, such as Ethiopia, ENEL has presented projects, for example, the photovoltaic plant in Metehara. 

After the “Great Chaos”. The Stabilisation and the Italian Role 

The Mediterranean mosaic was irrevocably disrupted in 2011, the year of the ‘Arab springs’ that liquidated the ruling classes, inspired by Arab nationalism, with which Mattei had built his geo-energetical policy. After more than ten years, a new phase can start. The relaunch of Italian action is a positive step. Indeed, some pitfalls must be considered. 

There are new players: China, which intends to invest in Algeria (to produce phosphates), and Russia itself is firmly established in Syria, with its bases in Tartus and Khmeimim; Türkiye – Erdoğan’s imperial vision triumphed in the ballot – is a reality in the Levant Mediterranean and has become increasingly central in energy flows, like the TAP. Nevertheless, a reorganisation is underway and there is a need for stabilisation. 

In recent months, Syria has returned to the Arab League, while Tunisia - notable for its 110 million in funding from Italy - has embarked on a path of complex stabilisation with Kaïs Saïed’s neo-presidential reforms. Likewise, recent agreements brokered by China have ushered in a new chapter in Middle East relations, with Iran firmly stretching its limes right up to Lebanon. Faced with the difficulties of France in Africa, the culture of Italian cooperation may be a reservoir that can still be drawn upon.

Previously (in Italian): https://www.centromachiavelli.com/2023/06/07/africa-verso-il-piano-mattei/  

Lorenzo Somigli. Columnist: energy & geopolitics; publications Gulf News, IACL, leSfide, Transatlantic Policy Quarterly. Reportage: Lebanon & Türkiye (2021). In Italy parliamentary assistant (2021-ongoing) & media expert (culture, art).