Enel, Italy’s largest utility, is pushing ahead with domestic natural gas exploration as local output is seen meeting 20 per cent of demand at a price as much as 40 per cent below imports.
The company expects permits for its onshore exploration in the Emilia Romagna region in the north to be issued in the first half of next year, Marco Arcelli, head of Enel's upstream gas division.
Enel will also work on accelerating the issuance of permits for its offshore exploration area, he said. Gas output in Italy can meet 20 per cent of demand in 20 years, reducing the need for imports, Mr Arcelli said. Italy meets 90 per cent of its needs through imports, mainly from North Africa and Russia.
Enel, which also produces in Algeria, signed a contract to buy supplies of liquefied fuel from the US as the shale boom boosts production and reduces prices. “Everybody speaks about the US, the shale revolution, how that’s making the U.S. more competitive, and in Italy we have a wealth of gas that could be produced, not at the same price level, but significantly cheaper than imports,” Mr Arcelli said.
“Our estimates are probably 30 per cent to 40 per cent cheaper, and people are not knocking on our door to say do more, do more and do it quicker.”
European Union countries are seeking to diversify their gas supplies as a dispute between Russia and Ukraine threatens to interrupt flows, as in similar conflicts in 2006 and 2009.
Italy is the EU's third-biggest gas consumer and depends on Russia for 29 per cent of its fuel, according to data from Brussels-based lobby group Eurogas.
Separately, Enel Green Power, Italy’s biggest renewable energy company, expects to sell its wind power assets in France by the end of this year and is ready to shed more of its European business as it focuses on emerging markets. EGP, majority owned by state-controlled utility
Enel, has gradually been shifting its attention away from Italy and Spain to countries with abundant resources, good growth prospects and reliable regulation. Around 59 per cent of its investment is spent in Latin America, 17 per cent earmarked for North America and 24 per cent for Europe.
Agencies
