Page 5 - AfrOil Week 15 2022

AfrOil COMMENTARY AfrOil

A deal in Algeria its presence in European gas markets. He said
This became evident on April 11, when Eni Sonatrach was ready to send more gas to Europe
signed a supply agreement with Algeria’s in the hope of boosting its market share above
national oil company Sonatrach that included the level of 30%.
concrete details. The deal provides for Sonatrach
to deliver 9bn cubic metres of gas per year in Eyes on Egypt
addition to the volumes it has already contracted Meanwhile, Italy has also not neglected Egypt,
to supply in 2022 and 2023, according to press which is keen to establish itself as a new hub for
reports. gas production, transport and processing in the
The agreement was signed during Italian Eastern Mediterranean.
Prime Minister Mario Draghi’s visit to Algeria, In a statement dated April 13, Eni said that
which began earlier this week. Draghi’s gov- Guido Brusco, its COO for natural resources,
ernment has been looking for ways to help the had met with Magdy Galal, the chairman of
country find alternatives to Russian gas supplies. Egyptian Natural Gas Holding Co. (EGAS), in
Officials in Rome hope to secure another 10 bcm Cairo to sign a framework agreement on max-
per year from Algeria and other new sources, imising LNG production and exports. The doc- Russia has
with additional volumes rising to 20 bcm by ument aims to promote the delivery of Egyptian
2024. natural gas to Europe – and especially to Italy traditionally been
Russia has been traditionally Italy’s largest – within the framework of wider-ranging efforts
source of gas, supplying fully 40% of all volumes to promote the transition to lower-carbon Italy’s largest
consumed in the country. In 2021, Italian buyers energy sources, the statement said. single source of
took delivery of 29 bcm of Russian gas. Algeria, In practical terms, Eni is looking to co-oper-
meanwhile, took second place, supplying only ate with EGAS by expanding upstream co-oper- gas, supplying 29
21 bcm last year. ation, by looking for new ways to accelerate gas
As such, the new supply deal signed during production growth, and by optimising explora- bcm in 2021
Draghi’s visit will make Algeria Italy’s largest gas tion work at existing and newly acquired blocks
supplier. It will also make Italy more dependent onshore and offshore Egypt. “This agreement,
on the subsea pipeline – TransMed, which runs together with the one signed for the restart of
from the Hassi R’Mel gas field through Tunisia to [the] Damietta liquefaction plant last year, will
Sicily – that Algeria uses to export up to 30 bcm provide LNG cargoes for overall volumes of
per year to the Italian market. (Russia, by con- up to 3 bcm in 2022 for [the] Eni LNG portfo-
trast, uses a combination of overland and subsea lio bound to Europe and Italy,” the statement
pipelines to send more than 150 bcm per year to explained.
Northern, Eastern and Southern Europe.) This framework agreement is not quite as
Italy’s turn to Algeria is no surprise, given concrete in its terms as the new supply deal with
that Eni is active in the North African coun- Algeria, but it does seem to be heavier on details
try and that export infrastructure is already in than the outcome of talks with Libya. At the very
place. Also, Algeria’s Energy Minister Mohamed least, it serves to demonstrate that Eni and the
Arkab was already saying in November last year Italian government are making serious attempts
that his country was keen to further expand to find new sources of gas. ™

(Image: Wikimedia Commons)

Week 15 13•April•2022 www. NEWSBASE .com P5