Page 5 - GLNG Week 10 2022

GLNG COMMENTARY GLNG

The Italian government
also wants to install an
FSRU in Italian waters
by the middle of this
year.

an immediate impact. The project was originally charter. The source added that Germany and
designed to have a capacity of 6mn tonnes per at least one other European country were also
year (tpy), and was anticipated to take more than seeking FSRUs, resulting in rising competition
three years to build. It is currently unknown in the market. FSRUs are cheaper to build than
whether the project’s design would stay the same onshore terminals, as well as taking less time
if it is revived, though keeping it unchanged to bring online, so it would not be surprising if
would help avoid any new permitting hurdles. demand for the vessels rises further still.
Given the urgency with which new regasifica- Snam owns stakes in Italy’s existing three
tion capacity is now being treated, it would not LNG import terminals, while Eni has a global
be surprising if Enel sticks to previous plans if it LNG business. The companies have not com-
wants to kick-start construction soon. mented on speculation that they could be
Little is known about the circumstances involved in the FSRU project.
under which plans for Porto Empedocle LNG The permitting process in Italy is complex
were previously abandoned. There was no pub- and this has held back development of new
lic announcement, but Sicily’s Regional Coun- regasification capacity beyond the three exist-
cilwoman for Energy, Daniela Baglieri, was ing terminals, which account for around 20%
quoted by Reuters as saying the project had been of Italian gas imports. There could also be chal- FSRUs are
cancelled at the start of the year on the grounds lenges related to local opposition to the devel-
that it was unsustainable. The Russia-Ukraine opment of new import terminals – indeed, this cheaper to build
war and Italy’s pivot away from Russian gas, was something Porto Empedocle LNG had pre- than onshore
however, appear to have prompted a rethink on viously struggled with.
sustainability concerns related to the project. LNG infrastructure is not the only type of terminals, as
Few further details have been provided so gas project to be facing challenges as Italy seeks
far, so the industry will have to wait for new to find new gas supply sources. Reuters cited well as taking
announcements from Enel on what to expect analysts as saying chronic underinvestment
next from Porto Empedocle LNG. in recent years meant the country would also less time to bring
struggle to use more capacity on its existing gas online.
What next? pipelines from various countries. They were
It is possible that Porto Empedocle LNG will not referring specifically to underinvestment in new
be the only new LNG project that Italy brings production.
online in the coming years. Cingolani also said The Russia-Ukraine crisis, though, is lead-
the government was planning to install a floating ing dramatic changes, for both energy policies
storage and regasification unit (FSRU) in Italian and specific projects. Approaches that were
waters by the middle of this year. previously considered out of the question
A source familiar with the matter told Reu- could suddenly start appearing viable giving
ters that energy firm Eni and infrastructure how rapidly the situation is changing and how
company Snam had been asked to help with much pressure European countries are under
the logistics, including seeking out an FSRU to to respond effectively.™

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