Friend, alien, smart: how Italy is remaking the gas map of the world amid the war in Ukraine

Friend, alien, smart: how Italy is remaking the gas map of the world amid the war in Ukraine

Why is Algeria in this story? And what should be learned by pragmatic Germans?

Friend, alien, smart: how Italy is remaking the gas map of the world amid the war in Ukraine

A blind bet on friendship with “gazprom” is extremely costly for Germany. EU and US anti-russian sanctions due to the attack on Ukraine seem to have finally buried the Nord Stream 2 gas pipeline, the launch of which could turn Germany into Europe's largest gas hub. And German industrialists dependent on russian gas are now under great pressure from Western partners and civic activists, who criticize them for complicity in financing russia's war in Ukraine.

This is not surprising. Germany is the EU's country which is most dependent on russian energy resources. Its political leaders have been working closely with the kremlin and state corporations for many years. Former Chancellor Gerhard Schröder has entered recent European history not as a prominent politician, but as a major lobbyist for vladimir putin's gas interests in the West.

It seemed that Italy, led by another putin’s friend, the eccentric Silvio Berlusconi, known for his ability to turn politics into a bright show with variety shows dancers and Italian football stars, should find himself in a similar situation. But on the Apennine Peninsula, history unfolded differently.

The late enlightenment

After it became known about the tragedy in Bucha, where russian soldiers brutally abused locals and committed hundreds of murders, Berlusconi expressed his “deep disappointment” with putin's behavior and, in fact, renounced the 20 years of friendship with him. And current Italian Prime Minister Mario Draghi has done his best to make Algeria the largest supplier of gas to Italian consumers instead of russia.

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One week ago, Draghi visited Algeria, where he signed an agreement to increase gas supplies by 9-10 billion cubic meters by the end of 2022. In total, imports of “blue fuel” to Italy from this North African country this year will reach 30-31 billion cubic meters, which is 2 billion cubic meters more than from russia (according to Bloomberg).

Rome hopes to increase gas purchases in Azerbaijan, Egypt and Qatar. But it is cooperation with Algeria that can change Italy's strategic role in the EU and increase its importance in the European gas market.

Following the footsteps of the Apennine Peninsula

The conditions for this are related to the geographical location of the country and the ability of its leadership to timely use diplomatic differences within the continent in the national interest.

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Algeria supplies gas to Europe through three pipelines. Two of them are fitted to Spain, and another one, TransMed, to Italy. One of the Spanish pipelines ran through Morocco, and was closed last year due to a diplomatic dispute between the two countries.

It came after Spain completely changed its 46-year-old policy towards Western Sahara, having supported Morocco for the first time in a territorial dispute with Algeria (in fact, countries are in conflict because of access to the largest phosphate deposits and fish-rich Atlantic coasts). After that, Algeria, the main deputy of Western Sahara, recalled its ambassador to Madrid.

The diplomatic conflict has escalated at the same time when Spain continues to discuss the terms of a new agreement with Algerian gas company “Sonatrach”.

The gas “corrida”

The Algerian supplier does not intend to completely cut off gas supplies to Spanish consumers, but has announced an increase in contract prices. Moreover, Spain has become the only partner of Algeria, which is threatened by rising prices.

The terms of the new agreements between these countries have not yet been determined. But after Mario Draghi's successful visit to Algeria, it became clear that Italy is becoming the main center of Algerian gas supplies to Europe, while the Spanish government's dream of gaining that role remained just a dream.

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