Italys dependence on Russian gas has been greatly reduced

Italy’s dependence on Russian gas has been greatly reduced

In recent months, Italy’s dependence on gas imports from Russia has decreased significantly, thanks to the Italian government’s agreements with other supplier countries, particularly Algeria and the countries of northern Europe. The results are impressive: in the first seven months of the year, 38 percent less Russian gas was imported than in the same period of 2021, and dependence on Russian supply, i.e. the amount of Russian gas in total imports, fell 40 percent last December up 18 percent observed in July.

Italy uses a lot of gas for energy production and imports almost everything (95 percent in 2021) as national production is very limited. Besides Russia, the largest supplier by 2021, the other countries from which Italy had purchased the most gas in recent years were Algeria (31 percent of imports in 2021), Qatar (9 percent), Azerbaijan (10 percent) and Libya (4 percent).

Algeria’s overtaking to Russia had already been reported in the first two months of the year by data released by the Ministry of Ecological Transition. In March, the volume of gas imported from Russia suddenly increased and then fell significantly from April.

Overall, Italy imported 10 billion cubic meters of gas from Russia in the first seven months of 2022, up from 17 billion a year earlier, while the amount of gas imported from Algeria rose to 13.2 from 12.8 billion cubic meters with an increase of just over 3 billion cubic meters Percent.

Algeria has pledged to increase gas supplies through an agreement reached in April with Eni, Italy’s largest energy company, and the Italian government. The agreement was signed by Eni’s CEO, Claudio Descalzi, and the President of Algerian company Sonatrach, Toufik Hakkar.

Initially, the Italian government had tried to get more supplies in less time: the original plan called for a significant increase already this year and full delivery of supplies in 2023, but in the end an agreement with longer deadlines was found. Another three billion cubic meters of gas will be delivered by this year, and in 2023 the supply will increase by 6 billion cubic meters. Finally, it will be fully operational by 2024 with at least 9 billion cubic meters more gas. Transmed, the gas pipeline connecting Algeria and Italy via Tunisia, is used to transport Algerian gas.

In recent months there has also been an increase in gas imports via the Griespass gas pipeline in Piedmont, from which gas comes from northern Europe, particularly the Netherlands and Norway.

Declining dependence on Russian gas bodes well for the government, even if the goal of achieving independence from Russian supplies is not so simple: finding alternative sources is becoming increasingly difficult.

On Thursday, the Minister of Ecological Transition, Roberto Cingolani, presented to the Council of Ministers some hypotheses to reduce gas consumption during the winter months: the plan is to reduce heating temperatures from 20 to 19 degrees Celsius in offices and homes, encouraged by an October beginning communication campaign.

The consumption reduction is part of the agreement reached between European countries last July to reduce natural gas consumption by 15 percent by March 2023. The aim is above all not to get into an emergency situation next winter, in which the gas reserves are at the limit.

Dependence on Russian gas is not just an Italian problem. Many other European countries also import most of their gas from Russia. In 2020, 38.1 percent of all gas imported into the European Union came from Russia. The second largest gas supplier is Norway, which accounts for only 16 percent, followed by Algeria, Great Britain and Qatar with smaller shares. The country that proportionally imports the most gas from Russia is Germany, 65.2 percent of the total in 2019, while Italy imported 43.3 percent.

Some countries, like Spain and Italy, have pledged to cut gas consumption by 7 percent by March 2023, less than half the July agreement.

Another goal of the Italian government is to speed up the procedures for the installation of two new regasification plants in Piombino and Ravenna, which are also much discussed in the election campaign. Thanks to the regasifiers, it is possible to import liquefied natural gas (LNG) from countries that are not connected to Italy by gas pipelines.

– Also read: There are other regasification projects as well

There are currently three working regasifiers in Italy. The oldest is an onshore (land) structure and is located in Panigaglia, in the province of La Spezia. Built in the 1970s, it has a maximum annual production of 3.5 billion cubic meters and is owned by Snam, the company that manages Italy’s gas pipeline network.

The largest of the three regasifiers is the Adriatico LNG Terminal, an offshore facility: it is an artificial island located in the sea off Porto Viro, in the province of Rovigo. It has a maximum annual production of 8 billion cubic meters of gas, has been active since 2009 and is managed by a joint venture between major US oil company ExxonMobil (70 percent), Qatar Petroleum (23 percent) and Snam (7 percent).

Finally, there is the Floating Storage and Regasification Units (FSRU) in the Tyrrhenian Sea off the coast between Livorno and Pisa. Basically, it is a regasification vessel that has been feeding gas into the grid since 2013 and has a maximum annual production of 3.75 billion cubic meters. It is 49.07 percent owned by Snam, 48.24 percent by the investment company First Sentier Investors and the rest by the LNG tanker rental and management company Golar LNG.

According to Cingolani, the installation of two new regasifiers in a short period of time could further reduce dependence on Russian gas by up to 10 percent. Prime Minister Mario Draghi, in his speech at the Rimini meeting, stated that independence can be achieved in autumn 2024 when the two new regasifiers will be installed. “It is a fundamental national security goal because Russia has not hesitated to use gas as a geopolitical weapon against Ukraine and its European allies,” Draghi said.