Algeria has come to the rescue to solve the gas shortage crisis in Italy. Both countries sealed 15 significant deals earlier this week during a high-profile business meeting held in the capital of the North African country.
During the meeting, Algeria and Italy signed an agreement for a gas supply deal worth $4 billion. The deal makes Algeria the biggest gas supplier to Italy – which had before now depended on Russia for its gas suppliers.
You will recall that since the beginning of the highly publicized war in Ukraine, Italy has made moves to cut ties with its biggest gas supplier, Russia. Instead, the Southern Europe country has turned to Algeria in order to manage the shortage of supply in the country.
Italy is one of the countries that aim to reduce its dependency on Russia – after its invasion of Ukraine. After the decision, Italy has chosen Algeria as its new major partner in the supply of gas to the country.
Algeria is currently the biggest exporter of gas in the African continent. The country also provides about 11 percent of the total natural gas consumed across Europe.
Speaking after signing the $4 billion gas supply deal with Algeria, the Italian Prime Minister Mario Draghi, said:
“Algeria has long been a key country for our energy supplies. The agreement signed on energy cooperation shows our determination to achieve even more in this sector.”
Speaking to newsmen after the meeting, the Prime Minister of Algeria, Aïmene Benabderrahmane, promised to ensure that his country works to “strengthen partnerships and investments, particularly in the oil, gas and mining production sectors with Italy.”
As part of the deal, both countries also signed agreements in areas such as sustainable development, micro-enterprises, and justice. The deals were made possible and facilitated by a new law implemented by the Algerian government on foreign investment.
According to sources, the total value of natural gas exported from Algeria from January to September 2021 exceeded $1.8 billion. In 2020, the export value reached approximately $4.6 billion U.S. dollars. With the new deal, the figure is projected to hit as much as $7 billion in 2022.
Before now, Algeria has received very little attention despite its huge gas reserves. European countries have depended on Russia for their gas supplies, but it appears that the tides are turning. Recent events in Russia have made many countries reconsider their trade partnerships with the transcontinental country.
Russia is the world’s leading exporter of gas. The country exported 201.7 billion cubic meters of gas via pipelines in 2021, and 39.6 billion cubic meters of liquefied natural gas (LNG).