© Reuters. FILE PHOTO: A logo of Italian multinational energy company Enel is seen at the Milan headquarters, Italy, February 5, 2020. REUTERS/Flavio Lo Scalzo/File Photo
By Stephen Jewkes and Angelo Amante
MILAN (Reuters) -Italy’s biggest utility Enel (MI:) is ready to dust off plans to build a liquefied (LNG) terminal in southern Italy as Rome steps up its efforts to find alternative supplies to replace Russian gas.
The plan will form part of Italian efforts to wean itself off Russian gas. Italy aims to become independent of Russian gas imports within 24-30 months, Energy Transition Minister Roberto Cingolani said on Tuesday.
In comments to Reuters on Tuesday Enel said it would be useful for Italy to have two additional LNG terminals so as to be less tied to gas pipelines.
“For this reason, Enel has given availability to resume the Porto Empedocle LNG plant project, that is fully permitted,” an Enel spokesperson said.
Since Russia invaded Ukraine, Italy has ramped up efforts to secure alternative gas sources, with LNG-rich Qatar a particular focus of attention.
Industry sources said to build a plant like Porto Empedocle in southern Sicily, originally designed to have a capacity of 8 billion cubic metres per year, could take more than three years.
“At the start of the year they had canceled this (Porto Empedocle) project because it was unsustainable. Now they’ve resurrected it,” Sicily energy manager Daniela Baglieri told Reuters.
Italy’s byzantine permitting process has virtually stopped development of LNG facilities beyond the three plants currently operative and which now account for around 20% of daily imports.
RACE AGAINST TIME
Italy, which uses gas to generate some 40% of electricity, imports more than 90% of its gas needs with Russian piped flows accounting for around 40%.
It has other pipeline connections to Algeria, Azerbaijan, Libya and the North Sea. But while the pipelines are underused, analysts say the problem is the lack of gas to fill them because of chronic underinvestment in recent years.
World demand for gas could rise if sanctions against Russia are extended to include oil or Russia opts to cut supplies via the Nord Stream 1 pipeline to Germany.
Given the time needed to boost upstream gas production, Rome is keen to expand LNG infrastructure and is looking to find at least one floating terminal, or FSRU.
On Tuesday Cingolani said Italy planned to install a new FSRU by the middle of this year.
A source familiar with the matter said energy group Eni and gas infrastructure group Snam had been asked to help out on the logistics including looking for the FSRU to charter.
“Competition is hot. Italy, Germany and at least one other European country are in the market looking for FSRUs,” the source said.
European countries are seeking to build LNG facilities to reduce their reliance on Russian gas. On Saturday Germany unveiled plans for a terminal.
Eni and Snam declined to comment.
Snam, which runs most of Italy’s gas storage business, has stakes in all three LNG terminals operating in Italy. Eni has an extensive worldwide LNG business.
The Italian state is the largest shareholder in Eni, Snam and Enel.
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