Gas, the country fails to comply with the contract signed with Italy – Energie & Risorse

Gas, the country fails to comply with the contract signed with Italy – Energie & Risorse
Gas, the country fails to comply with the contract signed with Italy – Energie & Risorse
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Sonatrach is struggling to find the additional volumes of natural gas promised by Algeria to Italy and this agreement may not be implemented on schedule. For the next months of November and December, an additional 2 billion cubic meters should have arrived from the North African country, but for now just 200 million are available.

After some hasty trips to Algeria, the Draghi government seemed to have managed to patch up Italy’s extreme dependence on Russian gas. So much so that for weeks in numerous observers they had highlighted the overtaking of Algiers on Moscow in the list of blue gold exporting countries in Italy. In the general euphoria, ‘quoted business’ had immediately highlighted some risks. Starting with the fact that the authoritarian North African state has close bilateral relations precisely with Russia and that the ability to honor new contractual commitments would be severely tested by modest infrastructure capacity available today in Algiers, in addition to the fact that in the face of the explosion in prices, the African country could soon have asked for one revision of the sale pricealso for existing contracts (a circumstance that has not yet occurred technically but is looming on the horizon).

Now the first knots seem to emerge. Since the beginning of the year, Algeria has supplied Italy with 13.9 billion cubic meters (m3), exceeding the initially planned volumes by 113%. But the new agreement signed between Sonatrach, the national hydrocarbon company, and Eni in recent months provided for the delivery in Italy of a further 6 billion cubic meters by the end of 2022. And still others until the beginning of 2024. The problem is that, of the additional 2 billion cubic meters expected in the two-month period November-December, Sonatrach can currently guarantee ‘only’ 200 million cubic meters. To try to reach the additional 9 billion per year required by Italy, Algeria will try to mobilize “the available transport capacities of the pipeline (Transmed) to ensure greater flexibility in energy supply and to gradually supply increasing volumes of gas starting from 2022, (to reach) 9 billion cubic meters of gas (additional) per year in 2023-24“. But, assuming that the African country succeeds in its intentions (we will soon see that it is actually a ‘mission impossible’), it is still too late for the upcoming winter.

Eni, present in Algeria since 1981, manages the pipeline with Sonatrach TransMed which connects the country to Italy, passing through Tunisia: it can transport up to 32 billion cubic meters of natural gas per year and, until a few months ago, allowed Algeria to export an average of 22 billion cubic meters. It’s this one additional capacity of 10 billion cubic meters that Italy wants to intercept. Except that in the current conditions that characterize the Algerian production of natural gas, it remains unable to mobilize such additional volumes. At most, it can reach 4 billion. A fact of which Sonatrach was well aware. Yet he did not desist from signing an illusory contract with Italy. Some doubts also remain with Eni: is it possible that the Italian giant, which has been present on the ground for decades, has had no uncertainty about Algeria’s real possibility of honoring its contractual commitments in the face of a limited infrastructure park?



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The article is in Italian

Tags: Gas country fails comply contract signed Italy Energie Risorse