It seems that Europe has secured its natural gas stocks for this winter, says the International Energy Agency. However, undersupply risks remain in the long term, and that's why the European Union countries, Italy in particular, keep looking for new partners. This opens new possibilities for aspiring natural gas importers, African Mozambique included.
As Europe rethinks its energy policy and attempts to wean itself from Russian gas, Italy is considering a similar strategy. Natural gas, which accounts for 51% of the country's electricity mix, is one of the key issues for the local energy import market, but Italy's plans go beyond simply reshaping its flows. Inspired by the shift in world energy dominance, the state has set out to explore a fresh opportunity to become an energy gateway between Europe and Africa through cooperation with its southern partner countries, Mozambique in particular. The latter, with its significant natural gas reserves, actually has the potential to be a key link in achieving Italy's goal.
"We want to push our companies to invest more and more in the continent, which has many raw materials but to which we can contribute with our skills," said Italian Prime Minister Giorgia Meloni at the joint conference held with the President of Mozambique Filipe Nyusi. There is a good reason for this statement: the African state has already taken the first steps towards becoming a gas exporter by sending its first LNG shipment to Europe in 2022. The batch went off from the Coral South floating platform, operated by Italian energy company Eni. The platform taps into a natural gas field with great potential: the reserve is assessed to be approximately 500 billion cubic meters (m3) of the resource. The "supergiant" geological complex Area 4, which includes the Coral, Mamba, and Agulha fields, has an estimated total capacity of 2.4 trillion m3—to compare, the volume of natural gas imported by Italy in 2022 was just over 70 billion m3.
The development of the field is barely out of the initial stage and needs continued investment. Currently, Coral's operator, Italian Eni, is in the process of designing Coral North FLNG, a replica of Coral South in terms of capacity. The development plan is currently being finalized in collaboration with partners and the Mozambique government, with a planned start-up date of 2027. Once completed, this project will undoubtedly set a foundation for Mozambique's natural gas extraction industry—but only just that.
The fact is that the floating platforms alone are not enough to organize stable imports. Offshore natural gas extraction and export are complex and weather-dependent technical processes where possibilities for storage and transport are quite limited. Addressing these barriers requires onshore facilities with liquefaction equipment and storage tanks, like the one designed for another large Mozambican deposit, Golfinho-Atum, with estimated reserves of over 2 trillion m3. The complex, called the Mozambique LNG Project, comprises two liquefaction trains, where the gas is processed, specially designed storage tanks, and an export jetty intended to welcome LNG ships of various sizes, shapes, and constructions. The project is owned by a consortium of domestic and international investors from Mozambique, Japan, Thailand, and India and is led by French operator TotalEnergies. Its development is currently on pause due to regional difficulties, but 90 percent of exports have already been contracted, and work is expected to continue as soon as the difficulties are resolved.
Looking at these and other ready-to-jump investors, Italy is not keen to miss the opportunity either—the more so its interest in Africa goes beyond simple economics. Here, the name of the game is the Mattei plan, which was called after the late Enrico Mattei, the founder of Eni. The initiative, introduced in the last century, intended to change the dynamics of the economic relationship between Africa and Europe by promoting a cooperative model and fostering peace and stability. Now, fifty years later, Meloni's cabinet aims to replicate this success and, consequently, reap the associated advantages.
As we have already seen, Mozambique's main problem is the transition from offshore to onshore. This, in turn, is impossible without stimulating the country's overall socio-economic growth and resolving regional conflicts that are halting the industry development. Italy's assistance and expertise can potentially play a major role here, as history shows: back in 1992, a fundamental mediation role of the Italian government helped to put an end to a long civil war in Mozambique. Since then, ties between the two states have remained strong, and Mozambique is now one of the priority countries of the Italian Development Cooperation Agency. In this environment, energy trade becomes undoubtedly important for both countries: "We agree with the President of Mozambique that the fields discovered off the northern coast of Mozambique are a huge opportunity for the development of this nation and also for strengthening our relationship," Meloni said.
So, the perspectives are already outlined. In anticipation of greater certainty and the results of socioeconomic cooperation, Italy is getting ready to receive natural gas not only for itself but for the whole of Europe. In this respect, the Italian policy falls into a global international strategy and technical steps necessary to realize the overall plan—let's look at them closely.
Establishing itself as a liquefied natural gas gateway requires more than just signing a purchase agreement: LNG must be converted back into a gaseous condition before it can be used. Italy, which has traditionally not utilized a substantial amount of LNG, must construct the infrastructure to enable this. Consequently, the state is now busy building new plants in addition to already existing regasification facilities at Panigaglia, Livorno, and Rovigo. Recently, Italian gas company Snam has constructed one more at Piombino and intends to open another location in Ravenna in the third quarter of 2024.
Once everything is in place, the country intends to reshape its overall role in the European energy market and even in the overall green transition process. Eni, along with other Italian firms, is currently looking to raise gas shipments to Europe through the construction of a cross-border pipeline. "Rome is able to supply gas to Austria, Hungary, and Bavaria through the Adriatic Line," Energy Minister Gilberto Pichetto Fratin confirmed. Given that Hungary and Germany's coal phase-out commitments are getting closer, but their coal productions and consumption are up, the Italian efforts should be more than welcome there.
Although Italy's actions seem well-intended, it stands to mention that not everyone thinks so. The Italian climate change think tank ECCO admits that "Mozambique represents an extremely relevant partner for Rome," but also notes that local gas projects are a "risky gamble" and offers to concentrate on the country's potential for renewables instead. The latter falls into the overall environmental agenda, but the world is not yet ready to fully switch to renewable sources, says the IEA. In this regard, gas, recognized as an intermediate fuel, is expected to be in demand for a long time, justifying investment in the Mozambican industry.
Another potential threat, according to ECCO, is "tensions in an extremely fragile context, where pre-existing socioeconomic and political claims are exacerbated by the dynamics associated with unequal access to opportunities arising from gas exploitation." This gets international partners to the need to contribute to the socio-economic sphere if they want healthy cooperation—which is something realized by everyone, from the Area 1 operator already making efforts to the European Union as a whole.
The latter is now planning to engage the Mattei plan for the purpose of Global Gateway, an investment strategy for sustainable infrastructure for its African partners: "Placing mutual benefits and common prosperity at the center of our relations with the African countries is the same approach promoted decades ago by Enrico Mattei, the founder of ENI. The Global Gateway could be considered as the first stepping-stone towards a fully-fledged European Marshall Plan for Africa," said Italian Minister of Foreign Affairs and International Cooperation Antonio Tajani.
Will Italy be able to repeat Mattei's feat this time around? The first steps have already been taken, and despite the high international competition in the region, the country's bid now looks quite justified. Its further fate, however, will depend on the joint efforts of the two international partners and their ability to overcome all available difficulties, which is something yet to be seen.
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