The Italian government’s new energy-driven approach to Africa will help the country bolster its own energy security and position itself as Europe’s next natural gas hub. But infrastructural challenges at home and above-ground risks in North Africa will remain obstacles. The Italian government has made a series of high-level, energy-centric visits to the wider Mediterranean region since Italian Prime Minister Giorgia Meloni took office at the end of 2022. For example, Meloni visited Libya’s capital Tripoli on Jan. 27-28 to discuss increased energy and migration cooperation with Abdul Hamid Dbeibah, the prime minister of Libya’s internationally recognized Government of National Unity. While there, she oversaw the signing of an $8 billion natural gas deal between Italian oil and gas giant Eni and Libya’s National Oil Corporation (NOC), and other deals for carbon capture and solar energy projects. Previously, Meloni visited Algeria’s capital Algiers on Jan. 22-23 to meet with President Abdelmadjid Tebboune and Prime Minister Aymen Benabderrahmane, and she oversaw the signing of a new set of deals aimed at further strengthening bilateral economic and energy ties. During the visit, Eni and Algeria’s state-owned Sonatrach signed a new set of deals aimed at further increasing Algeria’s gas exports to Italy, reducing carbon emissions, and building a second pipeline connecting the two countries.

• On Jan. 21-22, Italian Foreign Minister Antonio Tajani visited Egypt, where he met with Egyptian President Abdel Fattah al-Sisi and Arab League Secretary-General Ahmed Aboul-Gheit to discuss the conflict in neighboring Libya, as well as broader regional security and various bilateral issues. And Eni CEO Claudio Descalzi met with al-Sisi on Jan. 16 to sign a memorandum of understanding for Eni to assist Egypt in carbon emissions reduction, with a focus on gas flaring.
• Tajani also met with Tunisia’s President Kais Saied in Tunis on Jan. 18, Turkey’s Foreign Minister Mevlut Cavusoglu in Ankara on Jan. 13, and Lebanon’s Prime Minister Najib Mikati in Beirut on Dec. 23-24, 2022.
• Meloni traveled to Baghdad on Dec. 23, 2022, to meet with Iraq’s Prime Minister Mohammed Shia al-Sudani. The two leaders announced intentions to develop economic cooperation in various fields, including energy.

 These visits confirm the pivotal role energy and Eni have taken as a driver of the Meloni government’s foreign policy in the region. As she took office, Meloni promised to increase Italy’s presence and influence in Africa and the wider Mediterranean region through bilateral energy deals with a “non-predatory but collaborative posture,” as part of what she called a new “Mattei Plan” for Africa. Named after Eni’s late founder Enrico Mattei, the plan aims to replicate the logic of the country’s Eni-driven foreign policy of the 1950s-60s, whereby Rome sought to punch above its geopolitical weight by establishing bilateral relationships in Africa and the Middle East based on mutually beneficial energy deals. In practical terms, this would translate into leaving a sizable portion of the extracted resources in the country of origin to serve the domestic market and co-owning the related infrastructure. Eni’s recent deals in Algeria and Libya appear to follow this logic, with Italy leaving most of Libya’s natural gas to the domestic market and helping Algeria free up volumes for export by investing in the country’s energy efficiency and transition. 

• In the 1950s-60s, Mattei (who also championed Algeria’s independence from France) sought to boost Italy’s energy independence while adopting policies toward Africa that were regarded as unusually fair for the time. For instance, he offered Tunisia and Algeria an equal partnership for extracting their oil, as opposed to much lower margins offered to African countries by other oil majors.
• Eni says its project with the NOC in Libya will begin production in 2026, yielding around 7.7 billion cubic meters (bcm) of oil per year at peak capacity, of which 30% will be exported to Italy, with the remaining 70% going to Libya’s domestic market. 
• During his time in office, former Italian Prime Minister Mario Draghi made it a priority to increase Algerian gas supplies to Italy to help make up for volumes lost from Russia — which prior to its invasion of Ukraine provided about 40% of Italy’s gas needs — and in 2022 secured a deal under which the Algerian government pledged to ramp up gas exports to Italy by 50%. Draghi also visited Angola and the Republic of Congo in April 2022, where he struck new deals to boost liquified natural gas (LNG) imports to Italy.

In the short term, Italy’s key objective is to bolster its own security of natural gas supplies as the country phases out imports of Russian gas following Russia’s invasion of Ukraine. Natural gas accounts for almost half of electricity generation in Italy and is the main source of power for industries and heating for homes, and it is set to remain so for at least another decade. The deal with Algeria — which has already replaced Russia as Italy’s top natural gas supplier — will help the country make up for missing volumes of Russian gas in 2023 and 2024 and to phase it out completely by 2025, according to Descalzi. Until then, additional volumes contracted with Sonatrach will serve the Italian market. Eni will also continue to increase imports of natural gas via pipeline from Azerbaijan and of LNG from Egypt, Angola, the Republic of Congo, Nigeria and Mozambique.

• In 2022, Algerian gas accounted for 34.3% of Italy’s total demand, up from 29.5% in 2021. Descalzi recently said this figure will increase to 38% in 2023, adding that this will enable Italy to make it through the 2023-24 winter without disruptions. By 2024, Eni says it will import a total of 18 bcm of gas from Algeria, up from 9 bcm in 2021.
• Algeria also has enormous potential for recovery of waste gas, with an estimated 13.5 bcm per year lost in the atmosphere due to flaring, according to Italian think tank ECCO. On top of this, an additional 3.7 bcm of gas could be freed up for exports should the share of renewables in the Algerian electricity system grow to 15% (for instance, by adding 14 gigawatts of solar and wind capacity), yielding a total of 17.2 bcm of extra gas available for export without having to boost production.
• In recent months, Eni also announced the first shipment of LNG produced from the Coral gas field off the coast of Mozambique and a new contract for the construction and installation of a 2.4 million ton per annum floating liquefied natural gas (FLNG) unit offshore the Republic of Congo, as well as significant new gas discoveries in the eastern Mediterranean offshore Egypt and Cyprus.
• The overall contribution of Eni’s additional LNG volumes to Italy is expected to exceed 2 bcm between 2022 and 2023, to progressively reach 7 bcm between 2023 and 2024, and then finally 9 bcm between 2024 and 2025.

In the medium term, Italy plans to re-export the surplus gas it imports from Africa to Europe, making the peninsula a gas hub for the Continent. Italy’s geography makes it a natural land bridge between Europe and Africa, situating it as an ideal energy corridor between the two continents and a potential hub for the transportation of natural gas northward. Europe’s energy crisis and efforts to diversify its energy supplies away from Russia since the start of the Russia-Ukraine war in February 2022 mean the European Union is more open than ever to investing in alternative sources of energy. Italy hopes that by aligning its strategic interest in North Africa with Europe’s energy needs, Brussels will financially and politically support its ambitions in the region – for instance through REPowerEU, the European Commission’s plan to make the European Union independent from Russian fossil fuels by 2027, which allocates large funds to speed up the bloc’s diversification of natural gas supplies. If Italy’s strategy is successful, this would also help the country increase its weight within the European Union, as Rome would play an essential role in the bloc’s energy security.

• The REPowerEU plan includes about 225 billion euros ($242 billion) of untapped loans made available under the 2021 NextGenEU pandemic recovery plan and an additional 20 billion euros ($21.5 billion) in grants from the sale of emissions trading system allowances.
• Meloni confirmed her intention to use EU funds under the REPowerEU plan to completely wean Italy off Russian gas and turn the country into an energy hub for the bloc in a statement on Feb. 6. These comments followed a meeting with relevant ministers and the CEOs of Eni, Italian electricity and gas distributor Enel, Italian gas grid operator Snam, and Italian transmission system operator Terna.

Italy’s gas supply deals and import capacity should enable it to realize these gas corridor ambitions over time. Once the latest supply deals come to full fruition — with contracted volumes from Algeria plateauing in 2024 and production from Libya’s two new offshore fields expected to start in 2026 — and as additional supply deals are signed, Italy can start considering exporting excess volumes. The country already has the infrastructure necessary to further increase imports and has started work to expand it further. Moreover, Italy has been reducing its domestic consumption of natural gas in response to the energy crisis, another area that will be key to building oversupply. Overall, the country’s current and potential future import capacity exceeds its domestic consumption — meaning the country has the potential to become a net exporter of natural gas.  

• Italy has three entry points in the south connecting it with Algeria through the TransMed pipeline (35 bcm per year), with Libya through the Greenstream pipeline (12 bcm per year), and with Azerbaijan through the Trans Adriatic Pipeline (TAP) (10 bcm per year).
• Additionally, Italy can import LNG through three regasification terminals in the Veneto, Liguria, and Tuscany regions with a combined annual regasification capacity of 15.25 bcm, and is expected to inaugurate a new 5 bcm floating storage and regasification unit (FSRU) at Piombino’s port in 2023.
• Moreover, Italy has started work to double TAP’s capacity to 20 bcm by 2027 and has agreed with Algeria to resume work on the Algeria-Sardinia Galsi gas pipeline project, which would bring an additional annual capacity of 8 bmc.
• Italy’s domestic natural gas consumption stood at 75 bcm in 2021, with the government aiming for a 7% reduction target by March 2023 in compliance with an EU demand reduction target agreed on in 2022.