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Italy's ENI grants Gazprom access to Italian gas consumers
AFP
MILAN
Petroleumworld.com 15 11 06
Italian energy group ENI announced Tuesday it had agreed a new gas distribution deal with Russian partner Gazprom which will enable the Russian energy giant to sell directly to Italian consumers.
The agreement signals a decisive victory for state-controlled Gazprom, which has been pushing for greater access to European markets against a backdrop of widespread political opposition and public scepticism.
"This is the first time that we sell gas directly in continental Europe thanks to the liberalisation of the gas market in Italy," said a Gazprom spokesman contacted by AFP.
ENI chief executive officer Paolo Scaroni called the deal "a historic agreement", adding: "The new strategic alliance between ENI and Gazprom was made possible though a unique relationship that has existed for 50 years and which will extend over the next 30 years, covering all sectors."
In return for access to the Italian market, Gazprom agreed to extend its supply contract from 2017 to 2035, "confirming ENI as the worlds single largest customer of Gazprom", the statement from ENI said.
Until now ENI had distributed all Russian gas under its own name, but the Italian group did not specify how Gazprom would enter the Italian market as a rival distributor.
"Gazprom will sell directly into the Italian market increasing volumes of gas, building up to some 3.0 billion cubic metres from 2010 for the entire duration of the long-term supply contract," the statement said.
The Italian group did exclude the possibility of Gazprom buying a stake in Snam Rete Gas, the company which owns the Italian distribution network.
Italy was already highly dependent on Russian gas and was hit by shortages in January this year when Gazprom cut its exports to Ukraine, a key transit country for gas supplies to western Europe.
The action against Ukraine resulted from a politically-charged dispute about the price of Russian exports to its neighbour, but the episode sparked debate about energy security in Europe and raised fears about the reliability of Russia and state-controlled Gazprom as an energy supplier .
Nevertheless, Scaroni called the new agreement with Gazprom, signed in Moscow on Tuesday, "a major step towards the security of energy supply to our country".
Among further details contained in the new agreement, the two groups announced "a series of big projects" in production, without elaborating further, and Scaroni said during a press conference that Gazprom could even take a miniority stake in its electricity subsidiary Enipower.
"Enipower is particularly interesting for Gazprom because it is a consumer of gas," Scaroni said.
The "big projects" are to be finalised by the end of next year.
Gazprom and ENI will also cooperate in long-distance delivery of natural gas, an area that needs improvement in Russia.
In addition, they plan "to develop shared projects in liquefied natural gas (LNG) to serve the world gas market," the statement said.
AFP 14 1948 GMT 11 06
Copyright© 2006 AFP. All Rights Reserved.
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