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April 11, 2022

Italy looking to boost gas imports from Algeria to cut reliance on Russia

The country plans to secure nine million additional cubic metres of gas from Algeria.

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Italy is planning to sign a deal to increase gas imports from Algeria in a bid to reduce its dependence on Russian energy, in response to its invasion of Ukraine, reported Reuters, citing two sources.

Italy imports approximately 40% of its gas from Russia and intends to secure an additional nine million cubic metres (mcm) of gas, from Algeria, as it seeks alternative flows.

Algeria is said to be Italy’s second-biggest supplier of natural gas. Italy has been importing gas from Algeria, via the Transmed pipeline, since 1983.

With a daily capacity of more than 110mcm, the pipeline currently supplies less than 60mcm.

Earlier this week, Italian Energy Transition Minister Roberto Cingolani said that the country was in talks with seven countries to secure more gas. Some of these talks were “in a very advanced stage”.

In recent weeks, Italian Foreign Minister Luigi Di Maio and Italian firm Eni CEO Claudio Descalzi have visited Algeria to discuss potential ways to boost energy ties between the nations.

The source said: “Draghi will sign the institutional agreement between the countries, and then Eni and Sonatrach will complete the technical aspects.”

The source said the agreement is expected to include joint investments in renewable projects.

Eni and Algerian state-owned oil and gas company Sonatrach have also been discussing ways to increase gas supply to Italy in the short and medium term.

In March this year, Eni and Algerian state-owned oil company Sonatrach made a significant oil and gas discovery in the Zemlet el Arbi concession.

Based on the preliminary estimates, the new discovery holds approximately 140 million barrels of oil.

Despite this, doubt has been cast upon increasing gas production capacity in the short term, reported Reuters.

A second source said: “Production can be raised fast using infill techniques to enhance output at wells already producing, and fields not yet producing can be fast-tracked.”

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