Italy’s prime minister visits Algeria to finalise gas deal

Italian Prime Minister Mario Draghi sealed 15 agreements with Algeria's president on Monday as part of plans to increase gas imports and reduce Italy's reliance on Russian supplies.

Algerian President Abdelmadjid Tebboune shakes hands with Italian PM Mario Draghi (R) prior to their meeting at Chigi Palace, in Rome, on May 26, 2022.
Algerian President Abdelmadjid Tebboune shakes hands with Italian PM Mario Draghi prior to their meeting at Chigi Palace, in Rome, on May 26, 2022. Photo by Andreas SOLARO / AFP.

Draghi was received by President Abdelmadjid Tebboune, and the two went on to sign agreements and memorandums of understanding in areas ranging from
energy to sustainable development, justice and micro-enterprises.

The energy agreement signed on Monday is “a testament to our determination to achieve even more in this domain,” Draghi said, ahead of the expected
signing of an oil and gas supply deal between Algeria and a clutch of companies including Italian energy giant Eni.

READ ALSO: Italy signs gas deal with Algeria to reduce reliance on Russia

“Tomorrow, an important agreement between (US energy firm) Occidental (Petroleum), (Italian energy giant) Eni and (French oil company) Total providing significant volumes of natural gas” to Italy will be signed, Tebboune told reporters at a joint news conference with Draghi.

He was referring to a deal reported on Friday by Algeria’s APS news agency to raise gas deliveries to Italy by an extra four billion cubic metres this year.

Italy buys the majority of its natural gas from abroad, with some 45 percent of its imports historically coming from Russia.

But Rome has increasingly looked to Algeria, historically its second biggest supplier, to reduce that dependence after the war in Ukraine sparked sanctions against Moscow and sent energy prices soaring.

Algeria has therefore supplanted Russia to “become in recent months the biggest supplier of gas” to Italy, Draghi told reporters on Monday.

The two countries also expect to sign accords to bolster judicial, industrial and cultural cooperation, according to Draghi’s office.

According to APS, Algeria was set to furnish Italy with a total of around 20 billion cubic metres of gas in 2022 as a whole, before the latest deal.

Draghi previously visited Algeria in April, when he concluded a deal increasing Algerian deliveries to Italy through the Transmed pipeline by up to nine billion cubic metres per year in 2023-24.

In May, Eni signed a memorandum of understanding with Algeria’s Sonatrach to boost gas exploration in the North African country.

READ ALSO: What does Italy’s Algerian gas deal mean for energy supplies?

The MoU “will allow Sonatrach and Eni to evaluate the gas potential and opportunities for accelerated development at specific fields already discovered by Sonatrach in Algeria”, Eni said at the time.

Algeria is Africa’s biggest gas exporter and supplies around 11 percent of the natural gas consumed in Europe.

The trip could be Draghi’s last state visit: the prime minister attempted to resign on Thursday after the largest party in his coalition government boycotted a key vote.

At the request of President Sergio Mattarella, Draghi agreed to temporarily remain in post. He will address parliament on Wednesday to see whether a resolution can be reached.

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EU defence ministers hash out plan for sending more ammunition to Ukraine

EU defence ministers on Wednesday discussed plans to raid their stockpiles to rush one billion euros' worth of ammunition to Ukraine and place joint orders for more to ensure supplies keep flowing.

EU defence ministers hash out plan for sending more ammunition to Ukraine

Ukraine’s Western backers warn that Kyiv is facing a critical shortage of 155-millimetre howitzer shells as it fires thousands each day in its fight against a grinding Russian offensive.

Ministers meeting with their Ukrainian counterpart Oleksiy Reznikov in Stockholm were debating a three-pronged push to meet Kyiv’s immediate needs and bolster Europe’s defence industry for the longer term.

“Our priority number one is air defence systems, and also ammunition, ammunition and again ammunition,” Reznikov said as he arrived for the meeting.

The first part of the plan, as laid out by the EU’s foreign policy service, envisions using one billion euros from the bloc’s joint European Peace Facility to get member states to send shells in their stocks to Kyiv within weeks.

Ukraine’s European allies have already depleted their shelves, committing some €12 billion of military support, with €3.6 billion coming from the joint fund.

There are questions over how many shells Europe can spare without leaving itself too vulnerable, and defence ministers were due to provide details.

“I don’t know which is the level of stockpiles, that is why we are here together,” EU foreign policy chief Josep Borrell said.

The second part of the plan is to pool EU and Ukraine demands to place massive joint orders that would incentivise ammunition producers to ramp up their capacity.

The move represents an important shift for the 27-nation bloc as Russia’s war has sped up the push to coordinate more on defence.

Baltic state Estonia initially proposed spending four billion euros on a million shells for Ukraine and wants more new funds committed.

But EU officials say the money to cover Ukraine’s needs could come from another one billion euros already in the joint kitty.

“It’s not enough because we need one million rounds, and approximately it should be four billion euros,” Reznikov said. “We need more.”

EU officials say they hope to agree on a firm plan to send the ammunition to Ukraine by a meeting of foreign ministers on March 20th.

‘War economy mode’

EU countries are weighing whether the bloc’s central defence agency or member states with more experience should negotiate contracts, given a strong desire to avoid seeing the process slowed down by bureaucracy.

There is also a thorny debate about buying ammunition from outside the bloc, as some argue the priority should be speed over helping European industry.

“If there are other deliveries from other states, I don’t think we should exclude that possibility,” Sweden’s Defence Minister Pål Jonson said.

“I think the focus should be on helping Ukraine and finding the best way to accomplish it.”

More broadly, there is a clear sense that after years of lower investment after the Cold War, more needs to be done to get EU defence firms to step up their output fast.

“We are at a decisive moment in our support to Ukraine and it is absolutely crucial that we move towards a sort of war economy mode,” EU internal market commissioner Thierry Breton said.

“We need definitely to make sure that we can increase drastically our capacity to produce more in Europe,” he said.

But German Defence Minister Boris Pistorius said calls to put Europe’s economy on a war footing went too far.

“This would be a fatal signal” since it would mean that “we subordinate everything to the production of weapons and munitions”, he said.

“We – the European Union and Germany – are not at war.”

Article by AFP’s Max Delany