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Italy seeks independence from Russian gas in Algeria, Egypt, DRC, Angola



The government of Italy is diversifying its portfolio of gas suppliers to end the cooperation with Russia on the matter. The officials wish to swap for alternative sources within the next 18 months.


Since the invasion of Ukraine on 24 February, Italian Prime Minister Mario Draghi has made the diversification of his portfolio of hydrocarbon suppliers a strategic priority to get away from dependence on Russia, which currently provides the peninsula with 45% of its gas. Italy owes much to the Italian energy company Eni, the largest foreign producer in Africa, and its nearly 70 years of experience on the African continent.


Mario Draghi was due to travel to Luanda, the capital of Angola, on Wednesday, 20 April, and to Brazzaville, the capital of Congo, on Thursday to conclude new supply contracts. Being tested positive for Covid, the Italian Prime Minister was replaced at short notice by his Foreign Minister Luigi Di Maio, accompanied by the Minister for Ecological Transition Roberto Cingolani. (Credits: Reuters)


The government has been working on the change for two months now. Four days after the invasion of Russian troops into Ukraine, Italy stroke a deal to increase gas supplies from its Algerian partner, Sonatrach (read here). After this agreement on 28 February, Italy started cooperation with Egypt and is now aiming for new contracts: with Congo and Angola this week and Mozambique in May.


On Thursday, 21 April, the Minister for Ecological Transition, Roberto Cingolani, named the subject of independence from Russian gas "an ethical duty." He added: "It is clear that the whole of Europe is heavily dependent on Russia for gas, and this represents a serious geopolitical mistake made over the last twenty years."


"It is pointless to think it can be solved in a month. But from a certain point of view, it is a lot of money: with the energy, we give almost 1 billion euros a day to Russia, and you understand that we are indirectly financing the war," he stressed.


The minister also predicted that Italy would succeed in doing without Russian gas within 18 months. Previously, he had estimated that Italy needed "between 24 and 30 months" to achieve this. "By the second half of next year, we will begin to have almost complete independence," he announced. "The goal is to replace two-thirds of Moscow's supplies in weeks."


Regarding its African presence, ENI, the largest foreign energy producer in Africa, is developing two liquefied natural gas plants in the Republic of Congo that could supply 5 billion cubic meters of LNG when fully operational.


Eni also has upstream activities in Angola, where it recently signed a joint venture with BP. A government source said Angola could supply about 4 billion cubic meters of LNG a year within a few years.


Rome has already concluded agreements with Algeria and Egypt. Algeria, Italy's second-largest supplier, already contributes around 30% of its consumption. According to the Italian company Eni, the agreement signed with the Algerian national company, Sonatrach, will increase gas deliveries via the Transmed submarine pipeline "to 9 billion m3 per year" by 2023-2024.


According to ENI, due to the agreement with Egypt, up to 3 billion m3 of additional liquefied natural gas could be shipped to Europe and Italy this year.


Italy is also talking with Azerbaijan about the Trans Adriatic Pipeline (TAP) extension, which could eventually strengthen Italian and European energy security with an inflow of 10 billion cubic meters of gas per year.


This diversification of supply sources will not be cheap, as to import more liquefied natural gas, Italy is considering buying or renting floating storage and regasification units. Such spending will strain the finances of the eurozone's third-largest economy, which is already heavily in debt. Experts predict new taxes on businesses and individuals.


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