LNG

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” has been towed to a shipyard in Genoa for the first phase of a maintenance programme.

SNAM, the Italian gas grid operator and liquefied natural gas import terminals owner, reported an almost 70 percent surge in net profits as it advanced with its latest floating LNG venture at Ravenna on Italy’s East Coast.

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 at a shipyard and would be offline for six months.

ExxonMobil Corp.,  the largest US oil company and leading LNG producer and a partner of Qatar, will have its third-quarter earnings impacted by price shifts as it also found a buyer for its stake in the Adriatic LNG import terminal offshore the northeast coast of Italy.

The European Union may face pipeline natural gas supply issues again this winter because of a military conflict, this time by Azerbaijan against the ethnic Armenian enclave of Nagorno-Karabakh.

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.

Energean plc, the London-listed natural gas focused company with growing East Mediterranean assets offshore Israel, Egypt, Greece and Italy reported a more than 48 percent increase in revenues and swung to a net profit in 2022.

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.

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.

Italy has approved two projects for floating LNG import terminals off the coast of Ravenna in the eastern Adriatic Sea and at the West Coast port of Piombino, opposite the island of Elba.

Italy has said that as part of its energy security strategy two floating storage and regasification units (FSRUs) will be added to the three existing LNG import facilities.

The two new LNG terminals, both to be operated by Italy's state-controlled gas grid operator SNAM, will have a capacity of 5 billion cubic metres, covering around 15 percent of national annual gas consumption.

The FSRUs will be Italy’s fourth and fifth LNG import terminals after the onshore facility at Panigaglia near Genoa, another FSRU owned by OLT Offshore Toscana off the port of Livorno and the Adriatic LNG facility, an offshore gravity-based structure on the east coast.

The FSRU destined for Ravenna, the 170,000 cubic metres capacity “BW Singapore”, was purchased by SNAM and is currently bound by a charter agreement with a third party after which it will be deployed by the end of 2024.

SNAM Chief Executive Stefano Venier said that preparatory works would last two years with the Ravenna terminal expected to start operations in the fourth quarter of 2024.

“We have chosen Ravenna and Piombino both for the technical characteristics they offer us, but also because they're close to consumers,” stated Venier.

Italy is planning on the Piombino FSRU being operational by the end of March 2023.

The Piombino terminal will be in the form of the deployment of the 154,950 cubic metres capacity FSRU vessel “Golar Tundra”.

Ideal location

The port of Piombina was chosen because there was no other place in that region of Italy where there was a substantially unused jetty of 300 metres in length.

In addition the FSRU will be only 8.8 kilometres (5.5 miles) from the main SNAM gas network connections.

SNAM also officially ended its gas injection campaign at the end of October with the level of gas stocks managed by subsidiary Stogit reaching 95.2 percent for a total of 11.2 Bcm of natural gas in addition to the 4.5 Bcm held as strategic reserves.

The network operator added that the national energy system would also have access to an additional 1.1 Bcm held in the storage facilities of other operators.

“The supply of gas from storage will take place in the coming months on the basis of the guidelines soon to be issued by the Ministry of the Environment and Energy Security using transparent auction mechanisms,” added SNAM.