Algeria's gas exports to Italy collapsed by 60%

Algeria’s exports of natural gas to Italy collapsed during the first five months of the current year by about 60%, and Algerian gas coverage for the needs of Italy reaches from 33% to only 19%, and it becomes the second supplier of gas to Italy after Russia.

This decline comes at the height of the oil crisis, and the decline in Algeria’s revenues from oil, as a result of the decline in crude oil prices, at a time when Rome sent a clear signal to Algeria for the need to “abandon the long-term gas contracts.”

Director of SENAM company, which is responsible for the gas distribution network in Italy, Carlo Malakarni, said during a hearing session before the Committee on Industry at the Italian Senate “Sanato”; “A decline of about 60% of our imports of natural gas from Algeria was registered during 2015, due to pure commercial reasons”, but he did not refer to the nature and details of these reasons.

“There are other technical problems with the Algerian party, concerning Italian imports of gas. Algeria is no longer producing enough natural gas, as was the case previously. Algeria should modernize and develop the gas sector, both for the extraction and marketing, or what is related to the field of exploration, and modernization of infrastructure, so as to maintain the same level of exports.”

Statements of the same official before the Committee on Industry at the Senate is the evident that there is a desire by Italy to push Algeria to change the long-decades’ policy that it signed with Rome and several European partners, as he asserted in this regard; “This decline in our imports from Algerian gas is purely commercial, and is related to re-negotiating the free-market prices’ contracts, that is known as “Take or pay” rule, and that is not adopted by Algeria its dealings. It is not only due to the price but also more flexibility.”