ROME (Dow Jones)--This Friday's summit between Italian Prime Minister Romano Prodi and French President Nicolas Sarkozy will focus on energy deals, including one between the country's two power heavyweights, said an Italian diplomatic source on Wednesday.
"A strong issue will certainly be energy cooperation," said the source. "All the conditions are in place to clear things up and relaunch a strong energy cooperation (between the two countries)."
The two countries have cooled relations on energy issues after the French government sponsored a link up between Gaz de France SA and Suez SA to fend off a bid from Enel SpA (EN) for the latter in 2006.
Dialogue between Italy and France on energy "has been impossible" because of this, the person said.
He also said a deal between Enel and Eléctricite de France SA will be reached but didn't give details.
Enel and EdF signed a preliminary accord in May 2005 centered on nuclear power and participation in the European Pressurized Reactor, or EPR, technology which EdF is using to build a new nuclear power plant in Flamanville, France.
Earlier this month, EdF Chairman and Chief Executive Pierre Gadonneix said he was optimistic about signing a deal with Enel to develop nuclear power projects.
"We're about to close (the deal), we're at a good point," Enel Chairman Piero Gnudi told reporters when asked about Enel taking a stake in the EPR. He didn't provide further details.
In 2005, EdF said Enel would acquire 12.5% of EdF's European Pressurized Reactor program to build a 1,600-megawatt nuclear reactor.
Italy, which has among the highest power prices in Europe, banned nuclear power on domestic soil in a 1987 referendum.
The diplomatic source also said the two countries will work on an agreement to fix the bottlenecks limiting the transmission of power between them. Italy's grid Terna SpA and its French counterpart will aim to boost the transmission capacity.