LNG

Italian oil and gas major Eni said it closed the sale to Anglo-French energy company Perenco of Eni’s participation interest in several upstream permits in the Republic of the Congo in West Africa.

Italian floating LNG terminal company, OLT Offshore LNG Toscana controlled by Italian natural gas grid and LNG terminals operator Societa Nazionale Metanodotti (SNAM), said the “FSRU Toscana” vessel would be undergoing long-term maintenance for a longer period than initially expected.

Saipem, the Italian energy and LNG engineering company specialising in subsea and oil and gas development projects and pipelines, posted soaring third-quarter revenues of more than €3 billion ($3.2Bln) as global demand surged.

Saipem said revenues to the end of September 2023 amounted to €3.02Bln compared with €2.85Bln in the same three months of 2022.

Quarterly gross earnings increased to €230 million versus €168M in the prior-year quarter. Net profits in the quarter came in at €39M versus a loss of €8M in the same quarter last year.

The Milan-based company said new contracts added to the backlog in the first nine months of 2023 amounted to €11.92Bln, an increase from the €6.92Bln in the corresponding period of 2022.

The backlog as of September 30, 2023 amounted to a total of €27.57Bln. These contracts comprised €15.08Bln in asset-based services, €10.33Bln in Energy Carriers and €2.15Bln in Offshore Drilling of which €2.69Bln was being completed in 2023.

LNG awards

Saipem won contracts earlier in 2023 with three linked to increased LNG production in Angola, Trinidad and Papua New Guinea.

“Group performance further improved with another quarter of growth in terms of revenues, margins, net result and cash generation, confirming the trend already recorded in the first six months of the year,” said Saipem.

“The improvement is recorded in the Offshore, Engineering and Construction and Drilling divisions,” Saipem added.

Saipem is also showing continued traction in the Middle East. After the close of the quarter, on October 5, Saipem, in consortium with National Petroleum Construction Company (NPCC), signed on behalf of Abu Dhabi National Oil Company a contract related to the Hail and Ghasha development project-package one in the United Arab Emirates.

Saipem said its share of the contract amounted to around $4.1Bln. The project is aimed at developing the resources of the Hail and Ghasha natural gas fields located offshore Abu Dhabi.

The project scope of work encompasses the engineering, procurement and construction (EPC) of four drilling centres and one processing plant to be built on artificial islands, as well as various offshore structures and more than 300 kilometres of subsea pipelines.

Adriatic FSRU

As part of the domestic Italian LNG build-out Saipem was awarded a contract by Italian gas system operator SNAM for the construction of the associated facilities for the new Floating Storage and Regasification Unit (FSRU) to be located in the Adriatic Sea offshore Ravenna as Italy’s fifth import terminal.

The contract, awarded jointly via a temporary venture with two other Italian companies Rosetti Marino and Micoperi, comprises the EPC and installation of a new offshore facility and for the docking and mooring of the FSRU.

The latest Italian floating terminal will be connected to shore via a 26-inch offshore pipeline of 8.5km length, plus a 2.6 km onshore pipeline and a parallel fibre optic cable.

Saipem, the Italian energy and LNG engineering company, was awarded a contract by Italian gas system operator SNAM for the construction of the associated facilities for the new Floating Storage and Regasification Unit (FSRU) to be located in the Adriatic Sea offshore Ravenna as Italy’s fifth import terminal.

SNAM, the Italian natural gas grid and LNG terminals operator, said gas demand in Italy in the first quarter dropped by 19.4 percent to 20.54 billion cubic metres compared with 25.47 Bcm at the same time a year ago even as more LNG cargoes were unloaded at the Panigaglia onshore terminal near Genoa and Italy’s fourth terminal was starting operations at the end of May.

SNAM Chief Executive Stefano Venier said the natural gas grid and terminals owner would begin commercial operations by the end of May at Italy’s newest and fourth LNG import terminal at the Port of Piombino in Tuscany.

The National Oil Corporation (NOC) of Libya, a former LNG exporter, has announced that the Mellitah Oil and Gas Company, among whose shareholders is Italy’s Eni, had succeeded in returning a Mediterranean offshore natural gas well to production.

The proposed floating LNG terminal at the Italian Port of Piombino in northwest Italy has filled 86 percent of the regasification and cargo slots even amid a pending legal decision on whether the facility can start up as planned.

The Italian Port of Piombino in northwest Italy, located opposite the island of Elba, is facing further delays to host one of two floating storage and regasification units purchased by Italy’s grid and LNG terminals operator SNAM.

An Italian administrative court has postponed to July 5 a decision over a case being pursued by local opponents of the Piombino FSRU.

SNAM has plans to deploy the 154,950 cubic metres capacity FSRU “Golar Tundra” at Piombina.

However, some members of Piombino's municipal administration filed a legal challenge in late 2022 against the government-backed project, part of Italy’s plan to support the European Union’s replacement of Russian pipeline gas with LNG deliveries from nations such as the US, Qatar, Algeria and Egypt.

The government-appointed commissioner for the FSRU project, Eugenio Giani, had previously issued a statement saying he hoped to have authorization from the local municipality by the end of October, 2022, though instead they raised a challenge.

Ideal FSRU site

Commissioner Giani has said that Piombina was an ideal site for an FSRU with its under-used jetty and nearby pipeline gas infrastructure connections.

He has noted that there was no other place in that region of Italy where there was a “substantially unused jetty of 300 metres in length” and pipeline links.

The Piombina FSRU and the second SNAM FSRU would be Italy’s fourth and fifth LNG import terminals after the onshore facility at Panigaglia near Genoa, another FSRU offshore the port of Livorno and the Adriatic LNG facility, an offshore gravity-based structure on the east coast.

The second SNAM FSRU is the 170,000 cubic metres capacity “BW Singapore”. The vessel was purchased by SNAM and is currently bound by a charter agreement with a third party until November 2023.

According to SNAM the “BW Singapore” could be deployed eventually in the upper Adriatic Sea, close to the Port of Ravenna where there is already a small-scale onshore LNG fuel terminal and other petroleum storage infrastructure.

Italian energy company Eni said Italy needed to significantly increase its LNG import capacity as in 2023 Russian natural gas imports will be in single digits compared with a year-ago and the amounts could be down to zero.

Eni Chief Executive Claudio Descalzi said at a business event in Milan that for security of supplies Italy would need four LNG import facilities rather than the three currently operating.

“The change in the flow of natural gas from Russia means Italy must expand its energy infrastructure in the South to eliminate bottlenecks in the gas grid and to enlarge its storage system,” explained Descalzi.

The Eni CEO noted that natural gas flows from Russian sources had fallen from around 38 percent of Italy's total consumption to around 10 percent in recent months.

“Next year, we expect Russian natural gas be around 6 percent to 7 percent of the total, if even that,” he added.

The country currently has three LNG terminals, which have a capacity of around 17 billion cubic metres of gas.

Operators

SNAM, the gas gride operator whose name comes from Societa Nazionale Metanodotti (National Pipeline Company), operates the onshore Panigaglia LNG facility as well as having a controlling stake in the LNG facility, the “FSRU Toscana”, the floating storage and regasification unit moored off the Italian port of Livorno.

In addition to these two terminals, there is also the offshore Adriatic LNG facility owned  by units of QatarEnergy and ExxonMobil and receiving cargoes from Qatar and other sources.

SNAM has also agreed to purchase two FSRUs for deployment on the East and West coasts of Italy, though Eni believes a further two terminals are needed to give the country a total of seven LNG facilities.

Grid company SNAM also intends to invest more than €3 billion ($3.11Bln) to boost gas network efficiency and to construct more gas storage sites.

SNAM is bringing two FSRU into the Mediterranean to increase the quantities of LNG available, including the FSRU “BW Singapore” from BW Group of Singapore.

It has also bought the “Golar Tundra” for $350M from shipping group Golar LNG.

Italy is additionally seeking more pipeline gas from Algeria, while continuing to receive volumes on the Trans-Adriatic Pipeline from Azerbaijan.

“We have moved from Russian gas coming from pipelines to gas coming on ships,” explained Descalzi.

“We currently don't have enough LNG terminals so we believe that we need four additional facilities,” added the Eni CEO.