Business Maverick

Business Maverick

Italy Snaps Up Angolan Gas After Deals for North African Supply

Italy Snaps Up Angolan Gas After Deals for North African Supply
Luigi Di Maio, Italy's foreign minister, during a Bloomberg Television interview inside the emergency room at the foreign affairs ministry in Rome, Italy, on Tuesday, March 8, 2022. Italy is ready to support a third European Union package of sanctions that would expand the list of targeted banks and oligarchs in a bid to pressure Russia into a cease-fire, according to Di Maio.

Italy struck a deal to boost natural gas imports from Angola as Mario Draghi’s government rushes to cut energy dependence on Russia.

The agreement will increase Italy’s gas purchases from the southern African nation and facilitate joint energy projects that will also involve renewables and liquified natural gas, according to a statement.

It builds on recent deals with Algeria and Egypt and comes amid a scramble by European countries to secure alternatives to Russian supplies amid the war in Ukraine.

“We are delivering on our commitment to diversify energy sources,” Italian Foreign Minister Luigi Di Maio said on Wednesday.

Di Maio, along with Energy Minister Roberto Cingolani, traveled to Angola in lieu of Prime Minister Draghi, who tested positive for Covid-19 earlier this week.

The delegation’s next stop is the Republic of Congo, where Italian energy giant Eni SpA may announce another import agreement, people familiar with the matter said last week. That could be followed by a trip to Mozambique, though plans haven’t yet been confirmed, according to people familiar with the matter.

The deals in Angola and the Republic of Congo could bring Italy an additional 1.5 billion cubic meters and 5 billion cubic meters a year, respectively, the people said, asking not to be identified discussing private information.

Italy currently gets about 40% of its gas from Russia, and Draghi has acted quickly to try to replace that supply with flows from elsewhere since President Vladimir Putin invaded Ukraine in February.

Share of Natural Gas Imports Coming From Russia, 2020

With Eni already present in more than a dozen countries in Africa, the continent is an attractive option for Italy.

The company last week signed a major deal with Algeria that will see the North African country provide an additional 9 billion cubic meters of gas a year by 2023-2024 — and potentially become Italy’s top supplier. Eni also struck an agreement with Egypt to increase flows of liquefied natural gas to Italy.

Read more: Draghi Bets on Africa for Italy’s Exit From Russian Gas

“Diversification is possible and feasible relatively quickly, shorter than we imagined just a month ago,” Draghi said in an interview with Corriere della Sera on Sunday. BM

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