Page 7 - FSUOGM Week 11 2022

FSUOGM PIPELINES & TRANSPORT FSUOGM

Eni seeks exit from Blue Stream

ITALY ITALY’S Eni plans to sell its stake in the Blue Unlike BP, Shell and other international
Stream gas pipeline that carries Russian gas oil companies (IOCs), Eni has only a mar-
Eni is also disposing of under the Black Sea to Turkey in light of the esca- ginal presence in the Russian oil industry. It
its marginal Russian lating conflict in Ukraine. has partnerships with Rosneft at exploration
upstream assets. The move ends a decade-long partnership licences in the Arctic area, but those projects
at Blue Stream, and comes as other European have been frozen for years as a result of interna-
majors including BP and Shell also announce tional sanctions imposed on Russia in the wake
plans to withdraw from joint ventures with of its annexation of Crimea from Ukraine in
Russian companies. Eni has been partnering 2014. It also teamed up with Rosneft to explore
with Gazprom on projects for more than half a for oil in Russia’s Black Sea waters, but the pair
decade. drilled a dry well.
Blue Stream has a capacity of 16bn cubic Eni’s policy on Russia mirrors that of the
metres per year, and the operating company has Italian government, which retains partial con-
$1.6bn in total assets, according to data compiled trol of the company. Following the start of Mos-
by Bloomberg. Eni and Gazprom each own 50% cow’s invasion of Ukraine on February 24, Italy
stakes in the 774-km offshore section of the has vowed to reduce its reliance on Russian gas
pipeline. by expanding deliveries from other suppliers
The pipeline started flowing gas in 2003, including Algeria, Libya and Azerbaijan, as well
providing Gazprom with access to the lucrative as various LNG shippers. It emerged on March 8
Turkish gas market. It was joined in late 2019 by that Italian utility Enel was reportedly planning
TurkStream, a pipeline owned solely by Gaz- to revive previously abandoned plans to build
prom that also serves the company’s customers the Porto Empedocle LNG import terminal in
in southeast Europe. Sicily. ™

PERFORMANCE

European gas prices retreat from

record highs

EUROPE EUROPEAN gas prices have retreated from On the political front, Russia and Ukraine
record highs earlier this week, as Russian sup- appear to be closer to a diplomatic solution,
The April contract plies remain stable despite looming fears of a cut- even though the war continues unabated. On
briefly spiked at close off, and profit-taking. March 10, Russian Foreign Minister Sergei Lav-
to $4,000 per 1,000 The April gas delivery contract at the Dutch rov met with his Ukrainian counterpart Kuleba
cubic metres. TTF gas hub is now trading at around €127/ Dmytro for Turkey-brokered talks. While no
MWh, after briefly spiking at €345/MWh, or breakthroughs have been announced, a meeting
close to $4,000 per 1,000 cubic metres, in early between presidents Vladimir Putin and Volody-
trading on March 7. myr Zelenskiy was reportedly discussed.
Europe is seeing the first signs of demand Meanwhile, the Russian assault on Kyiv con-
destruction as a result of high prices, with Nor- tinues to grind on, with Moscow’s forces seem-
way’s Yara, one of the world’s largest fertiliser ingly having made limited progress in recent
manufacturers, announcing on March 9 that it days. So far Russia has only managed to capture
intended to curtail production of ammonia and one major city in Ukraine, Kherson, despite its
urea in Italy and France as gas feedstock is now significant military superiority in the conflict. ™
too expensive.
Meanwhile, the head of Ukraine’s gas transit
operator warned on March 10 that there was a
danger to gas transit flows to Europe because of
the presence of Russian troops on the territory
of gas compressor stations in the Lugansk and
Kharkiv regions. He warned that their actions
could lead “to a technological catastrophe in the
region.”

Week 11 16•March•2022 www. NEWSBASE .com P7