Italy’s Pipeline Hopes Dashed by Algeria

After finally winning the support of hesitant Italian authorities, the Galsi pipeline appeared to have been given a new chance at completion with leaders in Rome looked to diversify their vital energy imports. However, opposition is now emerging from the Algerian side of the project, with national officials warning that costs and technical challenges could delay or even halt the transport effort.

Dependent on imports for 90 percent of their natural gas needs, Italy set their sights on broadening their roster of production partners following last year’s political unrest in Tunisia and Libya. Violence and instability in both countries during 2011 led to delays or halts in production and output, threatening to cut Italy’s energy supplies. Libya’s civil war forced an evacuation of the staffs of most foreign firms leading to production shutdowns while Tunisia’s political protests led to a short closure of the pipeline used to ship Algerian natural gas to Italian shores, amounting to 35 percent of the country’s demand.

Eager to avoid such uncertainty again, Italian officials began voicing their support for the completion of the Galsi pipeline, linking Algerian fields with the island of Sardinia and the Italian marketplace. The result of an MOU signed in 2007, bringing to together the interests of Algeria’s state-backed Sonatrach, Euro energy firms Edison, Enel and Hera, the 900km pipeline would mark the second such project linking the North African nation with Italy, via a landing in Sardinia. However, unlike the Trans Mediterranean pipeline, the Galsi would carry an estimated 8 billion cubic meters of gas northwards upon completion directly from country to country, skipping a passage through Tunisia.

In October, Italian political leaders issued an appeal to Algeria to approve and move forward with the pipeline project with haste, allowing for Italian companies to pursue natural gas projects in the country with the assurance that transport lines will be available to them. However, resistance to the project has now begun to emerge in Algeria, with Energy and Mines Minister Youcef Yousfi casting doubt on the viability of the transport line in the near future.

“With regard to the Galsi project, the partners are waiting for technical and economic conditions to be present and also to obtain administrative authorization in Italy to go ahead with the project,” he told a local newspaper, according to Reuters.

Image: Eni

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