Page 11 - DMEA Week 48 2021

DMEA PIPELINES DMEA

Eni to sell stake in TransMed to Snam

AFRICA ITALY’S Eni has struck a deal with its former details on the agreement’s link to his company’s
subsidiary Snam on the sale of a minority stake energy transition strategy. “This transaction
in Trans Tunisian Pipeline Co. (TTPC) and allows us to free up new resources to be used
Transmediterranean Pipeline Co. (TMPC), the on our energy transition path, while at the same
operators of the TransMed natural gas pipeline time maintaining the management of a stra-
system that links Algeria to Italy. tegic infrastructure with Snam to ensure the
Eni announced in a press release dated security of natural gas supply to the country,” he
November 27 that it had signed an agreement said. “Gas will play a key role in the transition
with Snam on the sale of 49.9% stakes in TMPC of energy systems to zero-emission models, and
and TTPC. Under this agreement, it explained, it is important to maintain the availability and
Eni is slated to transfer all of its holdings in the diversification of supply routes for this resource.”
two pipelines to NewCo, a newly incorporated Marco Alverà, the CEO of Snam, spoke sim-
Italian firm. NewCo will then be split 50.1% to ilarly. “This deal consolidates Snam’s central role
Eni and 49.9% to Snam, it said. in Italy’s security of supply, as well as in energy
“Eni and Snam will exercise joint control over transport from the Mediterranean region,”
NewCo on the basis of equal governance prin- he stated. “Through this transaction, Snam is
ciples, and both companies will therefore con- bridging its infrastructure towards North Africa,
solidate NewCo through the equity method,” it which represents a key area for gas supplies to
added. Italy and forward-looking for hydrogen devel-
The Italian major put the value of the deal at opment. In the future, North Africa could also
€385mn ($436.23mn). It also said its new part- become a hub for producing solar energy and
nership with Snam was designed to bolster the green hydrogen.”
security of gas supplies to Italy while establishing The TransMed pipeline system was built to
a foundation for export-oriented green hydro- pump Algerian gas to Italy and are capable of
gen projects in North Africa. This is in line with handling around 30bn cubic metres per year. Its
the company’s wider efforts to focus on projects first phase was commissioned in 1983, with an
related to the energy transition and to optimise initial capacity of 15 bcm per year, and its second
its asset portfolio, it commented. phase, which doubled throughput capacity to 30
Claudio Descalzi, Eni’s CEO, offered more bcm per year, came on stream in 1994.™

FUELS

South Africa’s fuel prices reach record high

AFRICA SOUTH Africa’s fuel prices reached their highest which averaged at ZAR15.85 per dollar over
levels ever on Wednesday, 1 December. Prices in the past month, against ZAR14.72 the previous
South Africa’s economic hub province of Gaut- month. The average oil price also increased from
eng will break through the ZAR20 per litre level $82.50 a barrel to $83.
in the province. Fuel prices are regulated and set “The key driver [of the higher oil price] is the
by the government in South Africa. higher global demand recovery amid a weaker
Local fuel prices are determined by interna- supply response from non-OPEC and other oil
tional oil prices – as well as the dollar-rand value, producers,” the department said in a statement.
as South Africa buys oil in dollars. “There is a mismatch between demand and sup-
Economists have warned that the fuel hike ply, i.e., there is more demand for oil products
will put pressure on South Africa’s inflation rate, than the market can supply. The US and other
and is likely to result in much higher food prices. major oil consumers are co-ordinating efforts
South Africa’s Department of Energy to try to lower high prices by releasing oil from
announced that the petrol price will be hiked their inventory stocks, while OPEC and non-
by ZAR0.81 per litre on Wednesday, while die- OPEC members are refusing to increase oil pro-
sel will go up by between ZAR0.73 a litre, the duction to match the global recovery demand.”
Department of Mineral Resources and Energy The release of millions of barrels of strategic
announced. The latest price hike will push the oil reserves by the US government has done lit-
price of petrol – currently around ZAR19.50 tle to dampen the oil prices, it noted. The latest
a litre - to above ZAR20 in Gauteng and other fuel price hike comes ahead of South Africa’s key
inland provinces. At the start of November, pet- travel season. “It is important to appreciate that
rol prices were also raised by ZAR1.21, while fuel prices are soaring worldwide due to persis-
diesel increased by ZAR1.48. tently high crude oil prices,” the department said.
The latest fuel price hikes are due in large “Record pump prices have been experienced in
part to a sharp fall in the rand against the dollar, many other countries.”™

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