World

Algeria looks to Italy as a great energy partner after the crisis with Spain | Economy

An employee works in the Zarzaitine gas field (Algeria).
An employee works in the Zarzaitine gas field (Algeria).LOUAFI LARBI

A single word is sometimes enough to change the geopolitics of a region. The comparative adverb “more” in the letter that the President of Spain addressed to King Mohamed VI on March 14 was enough to trigger tectonic movements in the geopolitics of the Mediterranean and, above all, in the energy sector. Since Pedro Sánchez wrote to the Moroccan monarch that his autonomy proposal for Western Sahara, presented in 2007, is “the most serious, realistic and credible basis” to find a solution to the conflict, Algeria withdrew its ambassador in Madrid, Said Moussi , and builds more and more bridges with Italy. And the Italian government, whose president Mario Draghi travels to Algiers on Monday, seems to want to take advantage of the opportunity.

Putin’s war in Ukraine has made many countries look to Algeria as a possible replacement for Russian gas. The president of the Algerian energy company, Sonatrach, Touffik Hakkar, already warned on April 1 that Algeria is not in a position today to offer additional quantities to supply Russian gas. But he opened the door to large projects: “With the pace of our explorations, our capacities are going to double in four years, which suggests promising prospects with our European clients,” he said.

Spain had very good conditions to position itself as a possible distribution center for Algerian gas to Europe, until the moment when Algeria decided to withdraw its ambassador from Madrid. Now, the privileged place seems to be occupied only by Italy. A source from the European private energy sector, speaking on condition of anonymity, told EL PAÍS that for Europe the ideal country to supply part of the gas from Russia is Algeria. “No one else is closer. And in the energy sector, if you have a country close to you, that means you have better prices. Germany and the countries of Eastern Europe have become dependent on Russian gas not because they are idiots, but because the cost is much cheaper compared to ships that arrive from other continents”.

The same source acknowledges that, today, the collaboration between Italy and Algeria, to the detriment of Spain, is not reflected in any figure or specific contract. But he adds that Rome has three factors in its favor to become a possible distribution center for Algerian gas to Europe. The first, according to the aforementioned expert, is that there is a large Italian semi-public private company, Eni, willing to invest in exploration. Eni is the main international company in Algeria by volume of business. Italy is also Algeria’s third largest supplier, only behind China and France. And it is its first client, ahead of France and Spain.

The second factor in Italy’s favor is that there is great “political will” in Rome to expand gas imports from Algeria. “In this energy world, the fact that there is a political will accompanied by large private companies is essential. And that’s what Italy has.”

High dependency on Russian gas

He knows in depth all the sides of the coin.

subscribe

And the third factor in favor of Italy, according to the aforementioned source, is that the country has a great dependence on Russian gas. “Italy is hungrier than Spain, because it is more dependent on Russia,” he concludes. 40% of its gas imports come from Russia, followed at a distance by 27% from Algeria (21,000 million cubic meters). The objective of the Executive is to liquidate the dependence on Russian gas in 2025.

Italian Prime Minister Mario Draghi intends with his trip on Monday to pave the way to a future without dependence on Russian gas three years from now. In the Chigi Palace, seat of the Government, they underline that Algeria’s advantage is that there is already an infrastructure of two gas pipelines created. “And new connections could be created in the future,” indicates the same source.

The president of the Italian group Eni, Claudio Descalzi, traveled on April 3 to meet in Algiers with the head of the Algerian company Sonatrach. The goal was to strengthen the partnership between the two companies. The meeting between the two directors took place a few hours after Hakkar revealed that his country, the main gas supplier for Spain, will maintain the price for all its clients, although he did not rule out reviewing those of his “Spanish client”.

Draghi’s visit to Algiers on Monday is preceded by a telephone conversation with his Algerian counterpart, Abdelmayid Tebún, on April 1. In it they addressed the “strategic and energy” relations between the two countries. Bilateral summits were also set in the calendar for the coming months. And at the end of May, Tebún is expected to visit Rome.

The aforementioned source from the energy sector points out that, although Algeria cannot give up the money that comes from Spain for gas, Madrid “has killed the goose that lays the golden eggs.” Last year, Spain paid 2.6 billion euros for imported Algerian gas. The third vice president of the Government and minister for the Ecological Transition, Teresa Ribera, declared last week that Algeria had already planned since October to raise the price of gas to Spain through its company Sonatrach.

The same source insists that the repercussions go beyond the punctual increase in prices at this time. “In this panorama of war, Algeria is key. And you don’t spit in the face of a partner. Germany is looking for energy sources everywhere. And we, who have it so close at hand, have just closed a door. It may be that in one, two or three years, when the Algerian ambassador returns to Spain, it will no longer be possible to make up for lost time. Italy will have seized its moment.”

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button