A new deal signed between Algeria’s national oil company, Sonatrach, and Italian energy company, Eni, will see Algeria increasing the supply of natural gas to Italy in 2022 and beyond.

The agreement, signed by Toufik Hakkar, CEO of Sonatrach and Claudio Descalzi, CEO of Eni, in the presence of H.E. President Abdelmadjid Tebboune of Algeria and H.E. Prime Minister Mario Draghi of Italy in Algeria’s capital city of Algiers, paves the way for Eni to utilize Sonatrach’s TransMed/Enrico Mattei pipeline to increase gas supply by up to 9 billion cubic meters (bcm) per annum by 2023-24.

Algeria and Italy had initiated negotiations to expand energy relations in early February 2021 but owing to growing tensions between Europe and Russia- Italy’s main energy supplier- discussions to strengthen cooperation on energy have been fast-tracked resulting in the signing of the agreement together with a letter of intent to strengthen existing partnerships.

“Today is a special day for the relations between Italy and Algeria, in particular for Eni and Sonatrach,” Descalzi commented.

Eni, which currently produces 100,000 barrels of oil equivalent in Algeria, has also committed to increasing its exploration and production activities in the north African country and to invest in the fields of renewables, hydrogen, carbon capture, storage and utilization, and bio-refining to improve Algeria’s energy landscape while progressing towards the company’s goal to achieve carbon neutrality by 2050.
In 2021, Algeria increased its gas exports to Europe to about 53 bcm from 40 bcm in 2020 on the back of strong demand from Europe.