Libyan Gas Exports Stopped After Feb. 17 Revolution.
Libya was Africa's fourth-largest natural gas producer. It was able to export to Italy by up to 20% of the contracted volume in winter as a result of higher demand. The contracted volume with the state-owned National Oil Corp (NOC) was 8 BCM/y (about 800 MCF/d). But the Greenstream system to Sicily could pump up to 11 BCM/year.
NOC's Website in 2007 cited Fu'ad Krekshi, chairman of Mellitah Gas, a JV between NOC and the ENI group of Italy which owns and operates Greenstream, as saying in that winter Greestream had raised deliveries to 9 BCM/year. Greenstream had been sending gas to Italy since October 2004. Until 2007, the name of that JV was ENI North Africa BV.
Italy, Europe's third-largest gas market, has been seeking to raise imports of this clean fuel from Africa and the Caspian Sea region to reduce dependence on gas supplies from Russia. Russian deliveries to Italy dropped in early 2006 and in early 2008, as Gazprom temporarily halted supplies to Ukraine because of a gas-price dispute. Most Russian gas to Europe is sent by pipelines through Ukraine.
Libya until Feb. 7, 2011 used to produce about 2,800 MCF/d of natural gas, of which a major part was going to Italy - with the pumping to Sicily in the previous winters averaging nearly 1,000 MCF/d. About 700 t/y of LNG were shipped to Spain on tankers. Libya was the fourth-largest producer of gas in Africa behind Algeria, Egypt and Nigeria.
Total production from the Western Libya Gas Project (WLGP), a JV of NOC and ENI, in 2006 hit its plateau level of 1,150 MCF/day of gas and 100,000 b/d of liquid hydrocarbons. WLGP supplied 1,000 MCF/day of gas to Libya's al-Ruweis power plant. It was providing gas for the el-Harsha and West Tripoli power plants through the Mellitah-Tripoli gasline. Tripoli was hoping to free up for export the oil which was currently used in its power plants, replacing it with natural gas.
ENI - whose E&P arm Agip had developed the gas fields which fed Greenstream and was a partner in this and the Western Libya Gas Project (WLGP) - had been buying up to 2 BCM/year on top of the pipeline's contracted 8 BCM/year flow to the Sicilian coastal town of Gela.
The private Italian power and gas utility Edison used to buy 4 BCM/year of the Libyan gas via Greenstream. Like the ENI group, it was affected by the stoppage.
According to data from Italy's gas grid operator Snam Rete Gas, Greenstream supplies to Italy up to Feb. 20, 2011, amounted to 25.8 MCM. Under-Secretary for Industry Stefano Saglia by then had said: "In the case of eventual [Libyan] interruptions, we have non-commercial gas storage capacity available for security purposes". European Commission energy spokeswoman Marlene Holzner had said: "There is no problem with gas supply in general to Italy. Only 12% of gas imports to Italy come from Libya and this is a small amount". According to the EC, 33% of Italy's gas imports came from Algeria, 30% from Russia and 9% from Norway. Within Europe, Libya only delivered pipeline gas to Italy and LNG to Spain. Libyan LNG represented 1.5% of Spanish imports.
Work on a 275-km, 2 BCM/year pipeline from Mellitah to Gabes in Tunis began in late 2005, after an agreement on this announced on July 17 of that year. But the completion date for this pipeline, then projected to cost about $200m, was delayed. The pipeline was to run by Joint Gas, a Tunis-based JV of the NOC and Tunisia's power and gas utility Steg. The pipeline project has remained largely ink on paper.