Algeria and Italy to Bolster Investment Ties at Ancona Business Forum
Takeaway
The Algeria-Italy partnership presents a strategic opportunity for European utilities and energy companies. Monitor Eni's activities in Algeria, particularly its upstream projects and hydrogen initiatives. The increasing integration of the Algerian and Italian energy markets may lead to tighter gas supplies for other Mediterranean buyers, impacting spot prices and long-term contracts.
Algeria and Italy are set to deepen their economic partnership through an upcoming business forum in Ancona, Italy. The announcement was made by the Algerian Ambassador to Italy, Mohamed Khalifi, during an economic meeting in Fabriano, located in the Marche region of Italy. The forum aims to enhance Algerian-Italian investment and foster stronger economic collaborations between the two nations. The meeting in Fabriano on March 2nd, was organized by the Fabriano municipality in coordination with Abdelkader Majri, the head of the Islamic Cultural Center in the city.
Algeria is actively cultivating Italy as its preferred partner in energy, trade, and infrastructure, marking a shift in its economic alliances. This strategic realignment is driven by Europe's demand for secure gas supplies following the Ukraine crisis and Italy's ambition to become a Mediterranean energy hub. Trade between Algeria and Italy has been on the rise, with a total trade volume reaching nearly €9 billion between January and August 2025. Italy has become Algeria's top trading partner, surpassing China, Spain and France. This partnership is a cornerstone of Italy's "Mattei Plan for Africa," aimed at establishing Italy as a crucial bridge between Europe and Africa.
Energy cooperation remains a central pillar of the Algerian-Italian relationship. Natural gas accounts for a significant portion of Algerian exports to Italy, representing 84% of the total, or €5.94 billion, between January and August 2025. In 2023, Algerian supplies held strong at 25.5 bcm, valued at $14 billion. Italy's Eni and Algeria's Sonatrach have deepened their collaboration on natural gas, hydrogen, and renewable energy projects. A recent agreement between Eni and Sonatrach involves a $1.35 billion deal. The proposed SoutH2 Corridor, a 3,300 km pipeline, aims to transport green hydrogen produced in Algeria to Europe, aligning with the EU's renewable hydrogen import targets.
The Ancona business forum is expected to benefit both Algerian and Italian companies by creating opportunities for investment and partnership. Sectors like agriculture, automotive components, and green technologies are expected to see greater investment. In 2024, bilateral trade between Rome and Algiers reached $14 billion, with over 150 Italian firms operating in Algeria. The Algerian government aims to exceed $20 billion in trade with Italy. Italy's growing role strengthens EU energy security but concentrates influence in Rome's hands.
Looking ahead, the success of the Ancona business forum will depend on the ability of both countries to address challenges such as governance opacity and over-reliance on hydrocarbons. Upcoming decisions regarding the implementation of the Mattei Plan and further energy agreements between Eni and Sonatrach will be crucial catalysts. Investors should monitor the progress of the SoutH2 Corridor and other renewable energy projects, as well as any shifts in Algerian domestic policies that could impact foreign investment.