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Eni and Snam join forces on Algeria-Italy gas pipelines

Pipeline, Train, Vehicle Unsplash/Quinten de Graaf
Algeria is now Rome's biggest gas supplier after Russia curtailed its supply to Europe

Italian energy group Eni and gas grid operator Snam have clinched a partnership to jointly manage their assets in the gas pipelines connecting Algeria to Italy.

With Russia curtailing its gas flows to Europe, Algeria last year emerged as Rome’s biggest gas supplier, making the network between the two countries a strategic infrastructure for Rome’s energy security.

In a joint statement, the two companies said they would also study how to develop the network to support energy transition and promote the use of hydrogen.

The announcement follows the finalisation of a deal worth €405 million ($434.48 million) under which Snam acquired a stake in Eni’s assets in various companies managing the gas networks between North Africa and Italy.

In particular, Snam bought 49.9 percent of the equity interests held by Eni in the companies operating both the onshore gas pipelines running from the Algeria and Tunisia borders to the Tunisian coast and the offshore gas pipelines connecting the Tunisian coast to Italy.

EU countries have scrambled to find alternative gas suppliers following Russia’s invasion of Ukraine in February last year.

Prior to the Ukraine invasion, Russia supplied 45 percent of Italy’s gas, according to Eni, with Algeria providing 32 percent, Libya eight percent and the Netherlands five percent.

Algeria’s natural gas exports totalled 100.8 bcm in 2021, up 24.1 percent on 2020’s five-year low of 81.5 bcm, according to the 2022 BP Statistical Review of World Energy.

Annual liquefied natural gas (LNG) exports were 16.1 bcm in 2021, up 10.5 percent year-on-year, BP estimates.