29 billion cubic meters of gas per year. 38% of our methane requirements come from Russia. They need to be replaced quickly to eliminate our dependence on Moscow, which now requires payment in rubles. Diversification of energy sources began on the day Ukraine was invaded, and now the government’s work to unwind the close relationship with Moscow, which has intensified in recent years, is beginning to bear fruit as new supplies from Algeria, Libya, Mozambique and Angola arrive at the Series are with the recent missions of the Minister of Foreign Affairs Luigi Di Maio. Yesterday, during a visit to Baku, the Farnesina owner reached a new agreement with Azerbaijan that will increase the flow of methane flowing through the Tap pipeline to Turkey, Greece and Albania to 9.5 billion cubic meters. They currently reach up to 7 billion cubic meters per year for the Melendugno landing point in Puglia. At full speed, Tap could do ten. The agreement with the government of Azerbaijan added 2.5 billion methane to our supplies yesterday, but it is not excluded that it will reach its maximum capacity in the coming months. Di Maio’s deal envisages a plethora of supplier countries along with Eni, the main buyer of gas. The most important is Algeria, where Mario Draghi personally spent his time. Who spoke on the phone two days ago with Algerian President Abdelmadjid Tebboune to revive the energy partnership between the two countries.
The lines to the south
On the other hand, much more is needed to cover 29 billion cubic meters. The government strategy envisages an additional between 9 and 11 billion cubic meters, mainly from Algeria and to a lesser extent from Libya. The landing points are in Mazara del Vallo and Gela. Gas pipelines, which have been operating on narrow gauge for the last few years, now have to push gas to also pump our storage facilities, which fill up in the summer and shrink in the winter. As of March 31, Italy has 29.91% of gas reserves, according to Gie Agsi calculations, which are expected to grow to 90% by the end of September to cover winter needs. The current price development of the raw material does not help. Yesterday, the TTF (the gas traded on the Amsterdam market, which serves as a reference for Europe) was quoted at 114.7 euros per megawatt hour, a value that is based on the historical highs of the past few weeks. So buying now is cheap, but better so as not to be left dry afterwards. For this reason, yesterday Di Maio joined the Italian proposal of the Minister for Ecological Transition, Roberto Cingolani, urging Europe to have courage and introduce a cap on the price of gas. Europe’s bargaining power over supply deals with gas producers would be greater than Italy alone, but some Nordic countries, most notably the Netherlands, are reluctant to accept the proposal.
The regasification vessels
A third of the gas volumes arriving from Moscow via the Tarvisio landing point in Friuli would be covered by two floating terminals, each with a regasification capacity of 5 billion cubic meters per year: 10 billion. The two ships are negotiated by Snam. One of the two, in the purchase, would have reached the exclusive stage. The details are still top secret. What we learn would be installed in Piombino, where two days ago some meetings with local institutions took place. The other would be leased, although leasing fees have become prohibitive because there are very few LNG carriers of this type in the world. Discussions are in progress with some operators. According to sources, the cost of the fee would be between 130 and 150,000 euros per day, i.e. more than 50 million per year. These floating units will be powered by LNG tankers carrying liquefied natural gas bought from various suppliers with which the government has struck deals in recent weeks.
liquid methane
Alongside the United States, which has pledged to increase shipments of LNG to Europe, Eni is at the forefront, which already produces liquefied natural gas and will therefore direct these flows to Europe. Egypt and Qatar will contribute about 3 billion cubic meters in 2022 and about 5 billion in 2023. By 20232024, the sixlegged dog will be able to draw additional liquid natural gas from a project in Congo for about 5 billion cubic meters per year. . But most importantly with the Doha government that an agreement has been reached to increase volumes also in anticipation of a megahub under construction. The government of Qatar is already delivering 80% of the supplies to the Rovigo Adriatic Lng floating terminal, in whose capital the American ExxonMobile is based. These supply contracts were negotiated by Edison and have fixed terms. Recently, the Ministry of Transition approved a minor expansion of this terminal’s regasification capacity. The other two are the Olt of Livorno and that of Panigaglia in Liguria. The government plans to recover another billion cubic meters by straining its capacity. Another 23 billion cubic meters would instead come from national selfproduction, which is irrelevant at the moment as Italian gas covers 5% of our needs.
The thermoelectric node
The sustained demand also shot up due to the demands of thermoelectrics. One of the ways gas is used is to fuel the operation of thermoelectric power plants to generate electricity. Ours will run primarily on gas, less on coal given its polluting footprint and increasingly on renewable energy, which would require storage systems capable of storing the energy generated by wind and photovoltaics when not needed. 15% of our needs are covered by nuclear energy produced in France, which has been much more erratic this year due to the risk of failure. Hydropower also did not reach the levels of previous years because it rained little and fed the dams less. So, in addition to the strategic reserves, which amount to 4.6 billion cubic meters, work needs to be done on storage. But here not only a problem of suppliers, but also of prices. In general, the seasonal variation in consumption corresponds to a variation in prices during normal periods. On the other hand, the sudden increase in gas prices caught operators off guard and led to fewer purchases than usual. This could also reduce our reserves.