Page 4 - EurOil Week 35 2021

EurOil COMMENTARY EurOil

Italy could reap gains by expanding

its LNG import capacity

Extra LNG could help Italy make its energy cleaner and cheaper, especially

given difficulties in developing more renewable energy

ITALY ITALY could stand to benefit from increased thanks to an auction-based allocation mecha-
LNG import capacity, in order to further cur- nism introduced in April 2018. According to the
WHAT: tail its use of oil and coal, diversify its import International Gas Union (IGU), utilisation same
Italy is mulling an options, increase competition and meet rising to 82% in 2020, which was the second-highest
expansion of its LNG demand, especially given the country’s difficulty level in Europe behind Belgium with 90%. In
import capacity. in developing more renewable energy. comparison, utilisation in France came to only
Italy took 12.1bn cubic metres of LNG in 66%, while in Spain it was 37% and in the UK
WHY: 2020. Yet LNG accounts for a relatively small it was 38%.
Comparatively high share of gas use in the country, one of Europe’s Likewise, regasification capacity as a propor-
prices indicate that the largest gas markets, contributing only 17.8% in tion of overall gas consumption is comparatively
market could do with the 2020. The rest was covered by pipeline imports low at 22.1%, versus 33.4% for the Netherlands,
increased competition and its relatively small domestic supply. 71.5% for the UK and 83.5% for France.
that these projects would Italy was an early developer of regasifica-
bring. Extra gas would tion capacity, becoming the fourth country in Lack of competition
also ensure that Italy the world to commission an import terminal, Europe’s gas markets can differ greatly, and Italy’s
phases out coal and the 2.5mn tonne per year (tpy) Panigaglia LNG relatively small import capacity compared with
oil-fired power capacity facility, in 1971. This allowed it to tap supplies consumption is not cause for concern on its own.
as planned. from the Marsa El Brega LNG export plant on Indeed Germany, the EU’s biggest gas consumer,
the other side of the Mediterranean in Libya. But is yet to complete even one regasification facility.
WHAT NEXT: it was not until 2009 that Italy added its second Italy also has a fairly diverse set of options
Projects with a combined import terminal, the 5.8mn tpy Adriatic LNG. when it comes to pipeline imports. Its biggest
capacity of 24bn cubic And the third, the 2.7mn tpy Toscana FSRU, was supplier is Russia’s Gazprom, which delivered
metres per year have added in 2013. 19.7 bcm of gas last year via the TAG pipeline that
been proposed, but no National regasification capacity therefore sits runs from Austria and the TGP pipeline from
investment decisions at just over 11mn tpy. And in recent years, Ita- Switzerland. It took a further 11.5 bcm from
have been taken. ly’s terminals have been operating at utilisation Algeria, using the Trans-Med pipeline, along
levels that are comparatively high for Europe, with 4.2 bcm from Libya, via the Greenstream

P4 www. NEWSBASE .com Week 35 02•September•2021