Meloni in Algiers… The contours of the strategic partnership with Italy (Analysis)

AA / Istanbul

The visit of the President of the Italian Council Giorgia Meloni to Algiers on January 22 represents an affirmation of the process adopted by her predecessor, Mario Draghi, by betting on Algerian gas in order to replace Russian gas, and this after the energy crisis triggered by the war in Ukraine.
Meloni’s visit to Algeria will be able to dispel any ambiguity or other doubts about the continuation of the strategic partnership between Rome and Algiers, after the fall of the Italian left and the rise to power of the extreme right.
Algeria had always been cautious about the rise of far-right and populist ruling parties in Europe, particularly Italy. However, the extent of the interests between the two countries, particularly in the energy sector, now places itself above any ideology.
Thus, Meloni’s visit to Algiers is of particular importance insofar as it will define the contours of the partnership between the two countries for the next stage, not only in the gas sector but also in those of renewable energies, automotive industry, military cooperation, agriculture and construction and public works.
Although this is Meloni’s first visit since taking over the presidency of the government three months ago, the fact remains that she will meet Algerian President Abdelmajid Tebboune, for the second time, after their first meeting in the Egyptian city of Sharm el-Sheikh last November, on the sidelines of the World Climate Summit.

– The Gas and Energy Strategy

The main issue on which Meloni will discuss with President Tebboune, during his visit to Algeria on January 22 and 23, will focus on increasing the supply of Algerian gas to Italy, according to the agreed volume. , or 9 billion cubic meters, against a backdrop of competition from several European countries to acquire Algerian gas.
It should be recalled that Algerian gas supplies to Italy have increased from 21 billion cubic meters in 2021 to 25 billion cubic meters in 2022, and this volume should reach 30 billion cubic meters between 2023 and 2024.
Algeria aims to increase its gas exports from 56 billion cubic meters currently to 100 billion cubic meters in 2023.
This level seems high at the moment, which encourages Algeria to obtain the support of the Italian energy giant, the company ENI, through the increase of its investments in the field of exploration, production and the export of natural gas.
Meloni is expected to discuss with Tebboune his proposal to make Italy a distribution hub for Algerian gas in Europe, instead of Spain.
This visit should also relaunch the Galsi Gas Pipeline project (Algeria-Sardinia-Italy Gas Pipeline), linking Algeria to the Italian island of Sardinia, since the Enrico Matteti Gas Pipeline, which crosses Tunisia, is about to be opened. reach its maximum capacity, the volume of 32 billion cubic meters.
Add to this the fact that the gas pipeline linking Algeria to Italy via Tunisia reaches Slovenia, which is working to extend it to Hungary, which in turn aims to obtain supplies of Algerian gas.
It should be recalled that Italy had suspended the import of Russian gas, which represented 45% of its imports, in parallel with the insufficiency of exports from Algeria to meet European demand, which makes it likely to examine support to contribute to the construction of a trans-Saharan gas pipeline to transport gas from Nigeria to Europe.
This will strengthen the chances of building GALSI, whose capacity will fluctuate between 8 and 10 billion cubic meters annually, and which could be used for the export of green hydrogen.
It is also not excluded that Tebboune will once again bring up the issue of the export of electricity through the development of a marine cable between the two countries, especially since Algeria has a surplus of no less than 8000 megawatts.

– Automotive manufacturing

Algeria aims to strengthen its cooperation with the Italian automobile industry company FIAT, in order to build a factory, after the mixed success of the partnership with the French company Renault.
Algeria had signed last October with the FIAT group an agreement for the establishment of a car manufacturing project in the province of Oran (west).
This plant will make it possible to grant a significant share of the Algerian market to the Italian company, in view of the reduction by Algeria of its imports of new vehicles since 2017, which has caused an increase in demand which has exceeded supply, generating a price increase.
Thus, the file of the Italian automobile construction in Algeria represents one of the real stakes of the visit of Meloni in order to diversify the partnership between the two countries, except hydrocarbons.
This will also allow the entry into the Algerian market of other Italian companies specializing in spare parts, within the framework of subcontracting.

– Access to Africa

Meloni is also working to ensure that Italian products find a place in the African market, through Algeria, by encouraging Italian companies to invest in this country, as a first step, before embarking on the conquest of other African markets, particularly sub-Saharan ones.
The Italian ambassador in Algiers, Giovanni Polizzi, said in this regard that “Algeria could represent for Italian companies a gateway to the African market, which is characterized by its high and rapid growth rate”.
In addition, Algeria is interested in the experience of Italian small and medium-sized enterprises (SMEs), which represent 90% of the productive fabric of this southern European country.
Indeed, Algeria is working to benefit from the Italian experience in order to encourage its young people to create SMEs, not only to absorb the unemployment rate but also to increase growth and develop its economy.
The agri-food industries, fishing, the pharmaceutical industry and renewable energies are all sectors that arouse the interest of Italians, especially since the low cost of energy in Algeria compresses costs and charges and increases profits.

– Coordination in the Libyan file

The positions of Algiers and Rome on the Libyan file converge through their desire to ensure stability in this country, through the organization of elections which will put an end to the crisis of legitimacy and the split in this country. tanker, despite varying priorities.
Meloni is more interested in preventing a surge of illegal immigrants to her country from the Libyan coast as well as increasing the flow of Libyan gas to replace Russian gas.
As for Algeria, Libya’s stability means securing its southwestern borders and increasing its non-hydrocarbon exports to its neighbour.
Both Rome and Algiers support the government of National Union in Tripoli, chaired by Abdelhamid Dbeibeh, and do not recognize the government of Fathi Bachagha chosen by the Chamber of Deputies of Tobruk.
Meloni expressed his wish to work and collaborate with Dbeibeh and strengthen bilateral relations to face common challenges, in his response to the congratulatory message sent by the Libyan head of government after his election.
Ultimately, Italy and Algeria are linked by several common issues and challenges, both economic and political.
Rome is in a position to exploit the international and regional situation to reposition itself in Algeria, by strengthening trade, taking over Spain’s share in the Algerian market, competing with China as the leading trading partner of Algeria, even obtaining arms contracts in the light of American pressure on Algeria to reduce its military imports from Russia.
Cooperation between the two countries could serve the interests of Italy, which aims to guarantee its energy security by obtaining supplies of Algerian gas, to transform itself into a center for the distribution of Algerian and Nigerian gas to Europe and to strengthen its presence in the Algerian market to expand later to Africa.

*Translated from Arabic by Hatem Kattou

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Meloni in Algiers… The contours of the strategic partnership with Italy (Analysis)