Italy to Boost Ties With Algeria in Rush to Shun Russian Gas

(Bloomberg) -- Italy plans to strengthen its energy ties with Algeria in a new pact to be unveiled next week during Prime Minister Mario Draghi’s trip to the north African country.

The Italian premier, who’s seeking to reduce the country’s dependence on Russian natural gas, will sign an agreement Monday that will include increasing gas imports from Algeria and joint investments in renewables, according to people familiar with the matter who declined to be identified because the information isn’t public. 

Italy, which relies on Russian imports for about 40% its gas consumption, is seeking alternative supplies as European Union leaders consider taking a harsher stance against alleged Russian atrocities in the Ukraine war. Italy has said it would support a ban on Russian gas if the EU is united behind such a move. 

Italy’s plan is to increase imports from Algeria to about a third of its total gas needs in the coming months, one of the people said. Algeria currently accounts for about a quarter of Italy’s gas imports. Italy is also looking to boost supplies from Azerbaijan and Qatar, the people said.

Algerian and Italian government officials declined to comment on the pact. 

Italian Foreign Minister Luigi Di Maio and Eni SpA’s Chief Executive Officer Claudio Descalzi have already traveled to Algeria since the start of the war to discuss how to boost energy supply. In December, Eni and Algeria signed a $1.4-billion production sharing agreement for oil and gas output in the southern Berkine basin.

On March 20, Eni and Algeria’s Sonatrach announced a new oil and gas discovery in the Algerian desert with an estimated size of about 140 million barrels of oil.

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