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Italy Gas Situation Critical; May Suspend Firms Supplies

Italy Gas Situation Critical; May Suspend Firms Supplies
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Δευ, 6 Φεβρουαρίου 2012 - 18:17
Industry Minister Corrado Passera Monday said the situation of natural gas supplies to Italy is critical, but well monitored as domestic consumption reached a record high from the bitter cold and after supplies from Russian have been lower than requested for almost a week.
Industry Minister Corrado Passera Monday said the situation of natural gas supplies to Italy is critical, but well monitored as domestic consumption reached a record high from the bitter cold and after supplies from Russian have been lower than requested for almost a week.

Italian energy giant Eni SpA (E), which has close ties to Russian behemoth OAO Gazprom (GAZP.RS), may have to interrupt gas supplies to corporate companies--where contracts allow it--from Thursday, said Chief Executive Paolo Scaroni in an interview with Radio24 Monday.

Eni CEO said another cold snap is forecast in Russia this week and "we don't know how Gazprom will behave Thursday and Friday," indicating that until Wednesday the situation is under control.

"Yesterday we decided to pass to alert levels after [gas] consumption reached the highest level on record," said Passera on the sidelines of an event in Milan . "We have to be ready to face higher request than forecasts."  

Italian gas demand over the weekend reached record high as temperatures dropped to below freezing point and large parts of the country were blanketed by snow as the Siberian cold that hit Eastern Europe hit the peninsula. Rome saw its heaviest snow fall in almost three decades, and Monday schools and public offices in the capital were closed.

Gas demand is expected to rise Monday from Sunday's record high as industry and companies open up after the weekend pause. More than 50% of Italy 's electricity is generated from gas.

Italy has upped gas supplies from North Africa to offset the lower Russian rates, added Passera.

Passera said the country's strategic gas reserves haven't been tapped into. Companies are tapping into their stored gas, but people familiar with the matter said the stored capacity is high following a mild winter in previous months.

The industry ministry said it called a meeting for Monday of the committee that monitors the country's gas situation.

Eni has also boosted gas supplies from Northern Europe via Switzerland , said CEO Scaroni.

According to Italian gas grid Snam SpA (SRG.MI) data on its website as of Monday 1300 GMT, OAO Gazprom's (GAZP.RS) gas supplies to Italy via the Tarvisio entry point were expected to be 22% less than requested. Snam forecasts Russian gas imports to be 84.9 million cubic meters versus 103.4 million requested fro Monday.

Russia provides about 30% of Italy 's gas imports, while the rest mainly come from Algeria , Libya , Norway and Qatar .

An important source of supply was reduced Monday after the offshore liquefied natural gas terminal near the northeastern town of Rovigo was running at lower volumes, as heavy sea have stopped ships from docking since Friday.

An Eni spokesman said Russian gas flows to Europe may increase after Gazprom said the worst of the cold snap of the past days was over in the country.

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