Italy's giant pipeline Snam (SRG.MI) agreed to buy a significant state in a giant pipeline transmitting natural gas from Algeria to Italy, in early preparation for possible hydrogen imports from Africa to Europe, Reuters reported on November 27.

According to the Saturday statement, Europe's largest gas infrastructure group disclosed it would pay 385 million euros ($436 million) to energy company Eni (ENI.MI) for a 49.9% stake in the pipeline. The new deal will allow the company a joint control of the assets together with its fellow Italian partner already working with the Algerian pipeline.

Snam, known to make most of its money in Italy's gas transportation grid operation, has pledged to splash more money on clean and environmentally friendly business lines such as venturing into the green hydrogen production lines.

Meanwhile, the company is upgrading its national network to transport hydrogen fuel as its other European peers do.

"In the future, North Africa could also become a hub for producing solar energy and green hydrogen," Snam CEO Marco Alvera said in a joint statement with Eni.

The giant pipeline operator runs most of Italy's gas storage facilities and 20% of the TAP pipeline transporting Azeri gas into Italy. The deal reflects the rapid planning and development in the oil and gas industry as global efforts to cut down on greenhouse gas emissions intensifies.

Eni is ramping up the efforts to spin off its operations into new joint ventures to help reduce the debt burden and help fund its transformation to low-carbon energy. "This transaction allows us to free up new resources to be used on our energy transition path," said Claudio Descalzi, Eni Chief Executive.

Algeria's gas currently accounts for 30% of the 90% total gas imports by Italy.  The giant pipeline companies were involved in a deal that raised a EUR 90 million income in 2020.