Italy’s Meloni Seeks to Boost Gas Flows From Algeria
(Bloomberg) -- Giorgia Meloni is seeking to boost gas flows from Algeria, as Italy and Spain vie to secure more North African energy to cushion the loss of Middle Eastern supplies choked off by the Iran war.
“We have decided to strengthen our very solid cooperation, including by working on new fronts such as ocean gas and offshore, and this will enable a boost in gas flows,” the Italian prime minister was quoted as saying by Ansa Wednesday. She spoke after meetings with Algerian President Abdelmadjid Tebboune.
Spanish Foreign Minister José Manuel Albares will also travel to Algiers on Thursday. Algeria is the main gas supplier for both Italy and Spain, which receive gas from different pipelines.
The conflict in the Middle East has closed the critical Strait of Hormuz to most tanker traffic for more than three weeks. That’s kept huge volumes of gas off the global market, while an Iranian attack on a giant LNG plant in Qatar drove prices to a three-year high last week.
Italy’s state-controlled Eni SpA has been renegotiating contracts with Algerian supplier Sonatrach, whose gas — sent via pipeline across Tunisia — accounts for about 35% of Italy’s imports. The Algerian firm, however, is pushing for more spot-market sales, Bloomberg reported last week.
Separately, Bloomberg reported that Spain is considering increasing the gas it receives from Algeria via the Medgaz pipeline, operated by Sonatrach, Spain’s Naturgy and BlackRock.
Italy also brings in liquefied natural gas, and could face protracted tightness in supply following the attack in Qatar, which provided about 31% of the country’s LNG imports last year. Damage to the plant will likely take years to repair, forcing Italy to seek replacement volumes from other exporters such as the US.
Flows from Algeria via the TransMed pipeline have averaged about 20 billion cubic meters in recent years, roughly 2 billion a year below 2022-2023 levels, according to Italian Energy Ministry data. A return to those levels would still be insufficient to replace lost LNG volumes from Qatar, according to BloombergNEF.
Eni, which manages the TransMed pipeline together with Sonatrach, is central to Italy’s energy relationship with Algeria, operating as both an upstream partner and a key buyer of gas. The countries have also worked closely on tackling illegal migration across the Mediterranean Sea.
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