Page 13 - DMEA Week 04 2023

DMEA NEWS IN BRIEF DMEA

POLICY gas supplier and has proved to be a reliable fair in the 1960s, when he offered Algeria and
partner to help Rome wean itself off Russian Tunisia a 50-50 partnership for extracting
Italian PM travels to Algeria gas, which last year accounted for nearly 40% their oil - as opposed to the American and
of the country’s imports - making Italy the
British oil giants, which granted African
to sign landmark gas deal second major EU economy most reliant on countries much lower margins at the time.
Russian gas after Germany.
BNE
Italian Prime Minister Giorgia Meloni Algeria already supplied around 30%
completed a two-day visit to Algeria on of Italy’s natural gas needs in 2021, before
January 24. This is her first official trip to the Russia’s invasion of Ukraine. It currently REFINING
North African country, albeit her predecessor, makes up 38% of the country’s imports. The
Mario Draghi, visited Algiers twice last year. new deal is a step forward in Rome’s co- Crude oil shortage
The visit’s main goal was to consolidate operation with Algiers, and reflects Italy’s
diplomatic and commercial ties and secure ambition to become a transit hub for African deters Nigeria’s modular
a contract for increased gas exports. The gas to be transported further north to other
details of the deal had, for the most part, EU countries. refineries’ expansion
been negotiated by Mario Draghi during his “We want Italy to become a European hub
previous visits last summer. for Algerian gas. A junction for other EU The expansion plans for modular refineries
The deal, signed with the Algerian state- countries,” said Algeria’s ambassador to Rome, in Nigeria as part of efforts to cut billions of
owned gas company Sonatrach, grants Italy Abdelkrim Touahria, who was present at the dollars from the country’s annual import bill
the shipment of further 9bn cubic metres of event. have suffered a hitch majorly due to a lack
gas in addition to the supply already flowing However, in order to do so, Italy will of critical feedstock to run their operations,
through the TransMed pipeline. have to consistently expand its domestic gas BusinessDay has learnt.
This vital infrastructure connects Algeria network and build new energy corridors to For a long time, Nigeria has championed
to Sicily through Tunisia and under the Germany, Austria and Switzerland. the development of modular refineries due to
Mediterranean Sea; its expansion has already On the sidelines of the official visit, a shortage of conventional refineries across
been planned, aiming to augment the current Meloni and the Algerian Prime Minister, sub-Saharan Africa in addressing the deficit of
capacity of 33.5 bcm per year. Abdelmadjid Tebboune, visited a garden petroleum products.
However, according to Eni’s CEO Claudio in Algiers dedicated to Enrico Mattei, the Over 30 licences for modular refineries
Descalzi, who accompanied Meloni to Algiers, founder of the Italian energy company Eni, were issued in 2015 by the then Department
“[The current capacity] is still under-utilised. who supported Algeria in its independence of Petroleum Resources (now the
There are still more than 10 bcm that can fight with France in the 1950s and early 1960s. Nigerian Upstream Petroleum Regulatory
reach Italy”. Meloni announced last December that her Commission).
Speaking at the press conference, Meloni government’s new plan for Africa would be But only Edo Refinery and Petrochemical
said: “Today Algeria is our first gas supplier. I named “Piano Mattei”, after the entrepreneur Limited (6,000 barrels per day), Ogbele
have witnessed the signing of two agreements who perished in a mysterious plane crash Refinery (11,000 bpd) owned by Niger Delta
between Eni and Sonatrach: a deal to reduce in 1962. Meloni has repeatedly declared Petroleum Resources Ltd, and Waltersmith
greenhouse gases [GHGs] for sustainable that one of her priorities is to reaffirm Italy’s modular refinery (5,000 bpd) owned by
development, and a second landmark deal to leading role in the Mediterranean - not least Waltersmith Petroman operate efficiently.
further increase Algerian gas supplies to Italy to improve stability and security in North These three refineries, alongside other
(and therefore the EU), plus the planning of African countries in order to stem the flow of smaller refiners, are struggling to find crude
a new pipeline to transport hydrogen and illegal migrants attempting to reach Sicilian to run their refineries, a development that
enable Algeria to produce LNG. In sum, a shores. threatens their capacity to expand operations.
promising energy mix that could shield Italy Mattei’s figure is almost revered in Algeria “It’s difficult to talk about expansion when
from the ongoing energy crisis”. and still highly praised in Italy. His policies some modular refineries are sitting idle in
Algeria has quickly become Italy’s top towards Africa were regarded as unusually the last six months with no hope of when
they would get crude feedstock,” a modular
refinery operator who pleaded anonymity
said.
He added, “There is no incentive to pump
in more money to expand operations when
the current capacity is struggling to get return
on investment.”
Findings by BusinessDay showed the
Waltersmith modular refinery, which has
an initial capacity of 5,000bpd, is planned to
be expanded in phases to have a 20,000bpd
crude oil refining facility and a 25,000bpd
standalone condensate refining facility, taking
the total processing capacity to 50,000bpd.
Also, the Edo Refinery, which has an
initial capacity of 5,000bpd, also has a phase
2 expansion plan of 15,000bpd with full

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