Italy plans two floating LNG plants to reduce Russia’s gas dependence | Investment News


MILAN (Reuters) – Italy plans to install two floating storage and regasification units (FSRUs) to boost imports of liquefied natural gas (LNG) as part of plans to reduce dependence on Russian gas, said on Tuesday the Italian Minister for Energy Transition.

“Today, we have officially mandated (the gas group) Snam to negotiate the acquisition of an FSRU and the rental of a second,” Roberto Cingolani declared during a parliamentary hearing.

His comments confirmed sources who previously told Reuters that the two vessels, with a combined capacity of more than 10 billion cubic meters (bcm), would be located in the Tyrrhenian Sea and, likely, the Adriatic Sea.

The vessels will be located in ports close to existing pipeline infrastructure, one of the sources said.

“Infrastructure… will be identified as a strategic asset,” Cingolani said.

Rome imports about 30 billion cubic meters of gas from Russia each year – around 40% of its total gas imports – and is seeking to diversify its energy supplies following Moscow’s invasion of Ukraine.

Cingolani said earlier this month it would take at least three years to fully replace Russian imports, but said 20 billion cubic meters could be replaced in the “short to medium term” through measures including the use of more LNG.

Italy wants to increase its LNG imports from markets like Qatar, the United States and Mozambique, but currently only has three LNG plants which account for around 20% of daily imports.

Talks are ongoing with FSRU suppliers, but nothing has been concluded yet, one of the sources said.

Snam, whose main shareholder is the State, manages the Italian gas transmission network and most of the country’s gas storage activities. It also owns LNG plant assets.

Installing FSRUs is faster than building fixed terminals, but demand for ships has risen sharply as governments across Europe scramble to find quick ways to secure more LNG cargoes.

Dutch grid operator Gasunie is in talks with Germany to use FSRUs in the port town of Brunsbuettel, while the Netherlands, Belgium and Turkey are said to be testing the market.

“Governments have the ambition to bring additional regasification capacity to Europe. We will see 6 additional FSRUs this winter,” an industry source said.

(Reporting by Stephen Jewkes, Additional reporting by Marwa Rashad and Claudia CristoforiEditing by Mark Potter and Emelia Sithole-Matarise)

Copyright 2022 Thomson Reuters.


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