October 7, 2022

Wire Service Canada

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Increased gas and extraction in Sicily and the Adriatic: Italian production doubles

enhance production Gas A normal country, which, for the time being, is reaching at least an additional 2.5 billion annually to reach the target of 6.5 billion overall. More gas fromUpper Adriatic but also from Sicily. This is the task that the de facto government has entrusted to Eni, the country’s main operator that owns 90% of current production, so that it can offer controlled tariffs in excess of half in business bills. He was thought to be able to go on, to beat the doubling of national production that reached an all-time low in 2021, but recent technical meetings have led to a bath of realism. To exceed certain numbers, closed wells must be reopened. Operation with various forests, including economic ones. This was discussed yesterday in the whirlwind of meetings at Palazzo Chigi, between morning and afternoon, which were also attended by the CEO of Eni, Claudio Descalzi, along with the file coordinator, Under Secretary Roberto Garofoli, and the two ministers before them. Disagreement over power profile, Roberto Cingolani and Daniel Franco. Because the increase in gas production, along with the boost from renewables, will be the core of the decree expected on Friday in the Cabinet. It is a measure that aims to pump up to $7 billion into the field to boost aid for families. But the crossbar can stop at 5 billion.

Gas, peace will not be enough: high prices for a long time to come

plan “light”
In the meantime, it must be said, however, that it is still difficult to tackle the “light” version of the government’s gas plan in a short time as it is a matter of upgrading, where possible, a well machine that has been frozen due to the non-drilling ban ordered by Conte’s government in 2019. It’s not just a matter of carefully evaluating the costs and returns of at least $2 billion in process investments, but timing is the most important variable in this rolled around. Especially after the publication of the Sustainable Energy Transition Plan for Qualified Regions (Pitesai), and three years after its launch, which is full of risks despite the efforts of Minister Roberto Cingolani to open certain paragraphs. The state of emergency does not allow for risks and delays, but they keep saying these days within the government. Then the idea is that a custom condition will step in, if necessary, to disavow the Pitesai. Another hypothesis considered was the assignment of some kind of extraordinary delegate towards the tipping point, between mandates and deadlines. An option that will be considered in the second stage.

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Invoicing, price control to save business: More than 50% lower costs

Among the details that will be identified in the second stage, the audience can also be companies that are in difficulty, especially energy-intensive, to which energy and gas must be allocated at a reduced price. The goal is to save businesses from closing, and we can start with the sectors worst hit.

projects
As for the amount of gas that will be directed to the industry, the starting point was the goal of 3 billion cubic meters of gas stock. But even that number can be reduced in light of the evidence from the past few hours. Thus, a good industrial plot will receive green energy (about 25 TWh) at 50 euros per MWh and gas at 20 euro cents per standard cubic metre. Prices equal to less than a quarter of the current prices. The companies hope to hit a discount of 4.5 billion a year. But the search for gas and resources could dampen some of the ambitions. To do all this, additional gas reserves from the upper Adriatic, but also from Sicily will be used. For example, from the Argo and Cassiopea plants (10-12 billion cubic meters under the seabed of the Sicily Channel), where the Eni investment of about 700 million is already being carried out, from here it can soon reach 1-1.5 billion cubic meters.

In the meantime, Europe is ready to respond if “the Russian leadership will use the energy issue as a weapon,” Commission President Ursula von der Leyen said yesterday before the European Parliament, reassuring Brussels’ strategy to ensure security. Supplies, a topic he talked about in the afternoon during a phone conversation with Prime Minister Mario Draghi. Von der Leyen’s accusation is blunt: “At a time of high demand, Gazprom is limiting supplies to Europe, bringing reserves to the lowest level in the last ten years with no new sales on the spot market.” This behavior has already damaged Russia’s credibility as a reliable supplier and prompted Brussels (which depends on Moscow for about 40% of its gas) to look around, assuming a series of scenarios should the taps turn off. He pointed out that “we are in talks with countries ready to increase the export of liquefied natural gas to Europe,” recalling 120 ships that went to gas regasification stations on the continent in January, with a total of 10 billion cubic meters. But it also depends on contacts with major exporters such as Qatar, Nigeria and the USA, as well as with Asian partners such as Japan and South Korea.