ENI, Gazprom to Prolong Gas Supply Contract

The talks between Eni and Gazprom for the prolonging of the supply contracts of Russian gas to Italy, are in an advanced phase, and the two parts are negotiating on some contents. The piece of news will be published on L'Espresso magazine tomorrow.

The magazine reveals the backstage of the negotiation that after the stop given by the antitrust commission in 2005 has been lasting for three years. The parts are negotiating two kinds of deals. The first one is commercial, if the talks will be fruitful, Eni will have a prolonging of at least ten years of the supply contracts that expire in 2017 while Gazprom will be able to sell directly in Italy around 4 billion cubic metres of gas per year, buying half of the Italian joint venture Promgas Spa from Eni. The agreement leaves to the Russians the possibility to make new deals with other distributors and talks are currently under way. In this way the agreement will pass the examination of the antitrust commission. During the negotiations the Gazprom managers have relaunched the possibility of a more ambitious deal: asking to Eni to enter in the control of oil fields and plants on international basis. The project goes beyond the possibilities of collaboration for the development of new initiatives in countries that are sensible on a geopolitical point of view, like the republics in central Asia. According to the leaks published by L'Espresso the Russians would like to buy 40 pct of Eni Power the company that controls Eni's power plants, the oil field called Elephant at 800 kilometres south of Tripoli and the natural gas liquefying plant in Damietta in Egypt. Gazprom has offered to Eni its support for buying a minority stake in the Russian company Novatek the first independent producer of gas. Gazprom bought 20 pct of Novatek in August. Gazprom is ready to back Eni in the calls for tenders that have been announced to sell the former private giant Yukos in particular Arctic Gas. Eni could take part in these operations in collaboration with Enel. This option is confirmed by the active role in the negotiation of Esn Energo chairman Grigoriy Berezkin, this company is allied in Russia with Enel.