Page 5 - AfrOil Week 29 2022

AfrOil COMMENTARY AfrOil

Draghi hailed the signing of the documents as warming purposes will cause supply disruptions
beneficial for both countries, saying: “Algeria is and shortages. To that end, the EU signed a deal
a very important partner for Italy, in the energy with Azerbaijan for more gas on July 18.
sector, in the industry and business fields, in the But Birol criticised such moves as insuffi-
fight against criminality and in the search for cient. “It is categorically not enough to just rely
peace and stability in the Mediterranean.” on gas from non-Russian sources. These sup-
The prime minister also emphasised Algeria’s plies are simply not available in the volumes
growing importance as a source of gas for the required to substitute for missing deliveries
Italian market. He pointed out that the North from Russia,” Birol wrote in an article published
African state had “become in recent months the by the IEA, as fears grew that Russia, pushing
biggest supplier of gas” to his home country. back against European opposition to its war in
Russia used to provide Italy with nearly 29 Ukraine, could end gas deliveries to Europe in
bcm of gas per year, covering about 40% of the the run-up to the winter season.
country’s needs. Algeria, meanwhile, exported
nearly 23 bcm to Italy in 2021. Thanks to new Not enough Algeria is now
agreement, though, that figure is set to rise to 25 “This will be the case even if gas supplies from
bcm. Norway and Azerbaijan flow at maximum slated to deliver
capacity, if deliveries from North Africa stay
Europe’s need for gas close to last year’s levels, if domestic gas pro- 25 bcm of gas to
The increase is well-timed. The EU, which has duction in Europe continues to follow recent Italy this year
long been heavily reliant on Russian gas, has trends and if inflows of LNG increase at a simi-
seen energy supplies drop to less than 40% of lar record rate as they did in the first half of this
normal levels since Russia invaded Ukraine and year,” added Birol.
the West imposed sanctions against Moscow. The EU’s gas agreement with Azerbaijan so
At the same time, Algeria’s role as a gas sup- far amounts to no more than a memorandum of
plier to some EU countries, including Italy, has understanding (MoU) with Baku that, should all
increased. (By contrast, deliveries to Spain, conditions be met, the latter will more than dou-
another EU state, have declined this year as a ble exports of gas to at least 20 bcm per year by
consequence of diplomatic quarrels between 2027. Nevertheless, these two deals – and others
Madrid and Algiers.) under consideration – are not on a scale suffi-
Even so, Algeria cannot save Europe alone. cient to make up for Russia’s contribution to the
Fatih Birol, the executive director of the Inter- European energy mix. In 2021, Russia covered
national Energy Agency (IEA), sounded the about 40% of the EU’s total consumption, deliv-
alarm earlier this week, saying the EU’s attempts ering around 155 bcm of gas.
to diversify suppliers were inadequate when it In March of this year, EU officials floated a
comes to getting through the next winter with- proposal for reducing Russian gas imports by
out Russian gas. Under current circumstances, two thirds before the end of this year and then
immediate moves to cut demand are vital, he bringing the number down to zero by 2030. So
said. far, though, they have not been able to muster
Likewise, many officials in Brussels are wor- the support necessary to convert this into official
ried that rising demand for gas in winter for policy. ™

Italy receives Algerian gas via two subsea pipelines (Image: Wikimedia)

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