Since the invasion of Ukraine on February 24, Italian Prime Minister Mario Draghi has made the diversification of his portfolio of hydrocarbon suppliers a strategic priority, to break free at all costs from dependence on Russia, which currently supplies the peninsula 45% of its gas.
Italian diplomatic skill owes a great deal to the Italian energy company Eni, the leading foreign producer in Africa, and to its experience of nearly 70 years on the African continent.
Italy is diversifying its sources of gas supply at full speed: after Algeria, the peninsula will be able to count on help from Egypt, soon from Angola, Congo, Mozambique… and this is not finished. Who would have believed it only a month ago?
Indeed, on the very day of Russia’s invasion of Ukraine, Patrick Pouyanné declared that it was impossible for the European Union to do without Russian gas in the short term, on which it was 40% dependent. In fact, the “alternative” producing countries had to confirm this diagnosis very quickly, considering that they did not have the means to quickly compensate for such a quantity of gas if the Russian tap closed for one reason or another.
Nevertheless, the EU was taking steps – with the help, admittedly interested, of the United States – to find a solution to Russian gas in order to be able to include the energy weapon in its sanctions against Russia. .
Italy, among the EU countries most dependent on Russian gas, four days after Russian troops entered Ukraine on February 28, sent its Finance Minister Luigi di Maio and the boss of Eni to conclude an agreement to obtain increased gas deliveries from its Algerian partner Sonatrach.
Italy is one of Europe’s biggest consumers of gas, representing 42% of its energy consumption, and it imports 95% of its gas. And it is highly dependent on Russia, which currently supplies it with 45% of this gas.
A faster-than-expected exit from dependence on Russian gas
Since then, Italy’s diplomatic activity to ensure its near energy future and get out of its ultra dependence on Russian gas has only increased, Prime Minister Mario Draghi, has made the diversification of its suppliers a priority.
“We no longer want to depend on Russian gas, because economic dependence must not become political subjection,” he said in an interview with the daily “Il Corriere Della Sera” on Sunday.
He added:
“Diversification is possible and can be implemented relatively quickly, faster than we thought just a month ago. »
Eni, the largest foreign energy producer in Africa
Thus, after the agreement with Algeria on February 28, with Egypt before Easter, Italy is aiming for new agreements: with Congo and Angola this week, and Mozambique in May.
To this end, Mario Draghi was to go in person this Wednesday, April 20 to Luanda, the capital of Angola, and Thursday to Brazzaville, the capital of Congo, to conclude new supply contracts. However, positive for Covid, the Italian Prime Minister was replaced at the last moment by his Foreign Minister Luigi Di Maio, accompanied by the Minister for Ecological Transition Roberto Cingolani.
The successes of this intense Italian diplomatic activity on the African continent are a reflection (and the result) of the “excellent relations” that the Italian energy giant Eni has established during almost seventy years of presence in Africa. , where it is the leader both in terms of production and reserves, underlines for AFP Davide Tabarelli, boss of the think tank Nomisma Energia.
Multiple LNG projects are underway on the African continent
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 around 4 billion m3 of LNG per year for a few years.
Eni, which discovered the huge Zohr gas field in Egypt in 2015, is developing a floating LNG plant in Mozambique, which is expected to start production in the latter part of this year, processing around 3.4 million tonnes per year when will be operational.
Italy, which has five major import pipelines, wants to increase LNG imports and plans to integrate the three LNG terminals it currently operates. The government intends to acquire two floating storage and regasification units with a total capacity of around 10 bcm.
In fact, during the trip to Algeria with Luigi di Maio on February 28, Claudio Descalzi, the boss of Eni, will accompany the Italian delegation to Angola and the Congo.
Rome has therefore already concluded agreements with Algeria and Egypt. Algeria, Italy’s second supplier, already contributes around 30% of its consumption. According to Italian Eni, the agreement signed with the Algerian national company, Sonatrach will increase gas deliveries via the Transmed submarine gas pipeline “up to 9 billion m3 per year” by 2023-2024.
Thanks to the agreement concluded with Egypt, up to 3 billion m3 of additional liquefied natural gas could be shipped to Europe and Italy this year, according to ENI.
A diversification that will cost Italy already heavily indebted
This diversification of sources of supply will not be cheap, because in order to be able to import more liquefied natural gas Italy plans to buy or lease floating storage and regasification units.
The spending will weigh on the finances of the eurozone’s already heavily indebted third-largest economy, warn experts, who predict new taxes falling on businesses and individuals.
However, the government also hopes to reduce its dependence on fossil fuels by accelerating investment in renewables, in particular by reducing bureaucratic obstacles to the installation of wind turbines and solar panels.
The return of anti-waste measures from the first oil shock
Mario Draghi challenged his compatriots this month to convince them to make some sacrifices by acting directly on their individual consumption: “Do we want peace or do we want to turn on the air conditioning this summer”?
Thus with an “operation thermostat”, the government hopes to convince the population of the need to lower the heating by 1 degree in schools and administrations, before adopting asymmetrical measures for this summer with air conditioning.
This measure, which is precisely reminiscent of the “anti-waste” measures that followed the first oil shock of 1974, could save some 4 billion m3 of gas per year, or around 14% of the gas imported from Russia, according to the daily La Stampa.
