Following the outbreak of the Ukrainian conflict in February 2022, Russia reduced its gas flows to Europe. Since then, Algeria has become Italy’s leading gas supplier. And the network of pipelines between the two countries now represents a strategic infrastructure for the energy security of Rome.
President Tebboune also declared in December 2022 that Algeria was considering making its Italian partner a hub for the distribution of Algerian gas to other European countries, including Germany. For their part, Italian companies in the hydrocarbons sector are multiplying initiatives to make the most of the exploitation of Algerian gas.
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In this context, the Italian national hydrocarbons company, ENI Spa, and Snam Spa, the main Italian natural gas transport company, announced on Tuesday 10 January 2023 that they had finalized an association contract between the two companies concerning the Algeria-Italy gas pipelines.
The agreement concerns the Trans Tunisian Pipeline Co (TTPC) and the TransMediterranean Pipeline Co (TMPC) which cover the land and maritime links between the two countries. The TTPC goes from Algeria to Tunisia, up to the coast; the TMPC connects the Tunisian coast to Italy.
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SeaCorridor, the company founded under this agreement, will hold a 50% stake in Transmed, the Algerian-Italian company whose Sonatrach owns 50% of the shares.
Algeria, a major partner of Europe in hydrogen and energy transition
Official statement of ENI-SNAM
Thus, the Eni-Snam partnership provides for the purchase by Snam of 49.9% of the shares held (directly and indirectly) by Eni in the companies that operate the two groups of international gas pipelines linking Algeria to Italy. These are the onshore gas pipelines that extend from the Algerian-Tunisian border to the Tunisian coast and the offshore gas pipelines linking the Tunisian coast to Italy.
The stakes were contributed by Eni to a newly created company — SeaCorridor Srl — in which Snam acquired 49.9% of the share capital. The 50.1% still remaining in the possession of Eni. The total consideration paid by Snam to Eni in connection with this transaction is approximately 405 million euros (435 million USD).
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Moreover, in a joint statement, the two companies indicated that they are also studying how to develop the network to support the energy transition and promote the use of hydrogen.
In December, during discussions between Algeria and Germany, there was talk of the possibility of transporting green hydrogen via Italian connections. For its part, Sonatrach pointed out that the networks between Algeria and Europe could transport the resource given the abundance of solar energy in the Sahara.
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“The transaction allows Eni and Snam to combine their skills on a strategic route to secure Italy’s natural gas supply. It also promotes potential development initiatives in the hydrogen value chain thanks to the natural resources available to North Africa. The North Africa-Europe link represents a key element in the global process of decarbonization in favor of the energy transition”, explain the two companies.
