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Italy Sees No Need to Trigger Emergency Gas Alert Amid...

Business Maverick

Business Maverick

Italy Sees No Need to Trigger Emergency Gas Alert Amid Higher Africa Flows

The ENI SpA logo sits on the company's gas station in Rome, Italy, on Friday, April 24, 2020. Eni reported a 94% drop in first-quarter profit and cut its production forecast for the year as demand is crushed by the coronavirus pandemic. Photographer: Alessia Pierdomenico/Bloomberg
By Bloomberg
20 Jun 2022 0

Italy’s government does not see an immediate need to trigger an emergency gas alert and could put on hold a plan to take that decision as soon as this week following an increase in flows from other countries, according to a person familiar with the matter.

Energy importer Eni SpA said in recent days that its gas demand from Russia has only been partly met, leading to discussions by the Italian government over possibly triggering emergency energy status for the country, which among other things would scale up the use of coal.

But Italy may hold off on triggering the alert, as efforts by the administration led by Prime Minister Mario Draghi to seal new energy deals in north Africa are increasing other flows, the person said, asking not to be named discussing confidential deliberations.

A spokesperson for the Italian government declined to comment on the plans.

The decision for Italy comes at a time when other European countries are faced with a reduction in flows from Russia. Germany has been stepping up efforts to respond to a cut in Russian gas supplies by reviving coal plants and providing financing to secure gas for the winter.

A spokesman for Germany’s Economy Ministry said at a Monday news conference that, despite the latest policy reversal, the ruling coalition in Berlin is standing by a pledge to aim for a complete exit from coal by 2030.

Algeria Imports

Eni Chief Executive Officer Claudio Descalzi said over the weekend that imports of gas from Algeria have more than doubled to reach 64 million cubic meters via pipelines, and 4 million cubic meters via liquefied natural gas, with more flows expected in coming weeks thanks to recent agreements.

Italy, which before the invasion of Ukraine imported about 40% of its total gas from Russia, has acted fast to diversify, sealing accords with Algeria, Angola, Qatar and other producers.

State-controlled Eni on Sunday became the second foreign firm to win a stake in a $29 billion project to expand Qatar’s production of LNG with a 3.1% holding in the project.

A final decision on the government measure could come following an emergency gas committee meeting Tuesday and a separate meeting between Energy Minister Roberto Cingolani and company officials Wednesday, the person said, adding that Rome has urged energy groups to accelerate their stocking-up of gas to prevent shortages next winter.

“We will need to have 70%-80 of storage filling by October to cope with peaks,” Eni’s Descalzi said over the weekend.

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