Edison CEO Nicola Monti said the group had two pipeline contracts that would expire in the next two years. — Reuters
MILAN: Italian gas and electric utility Edison plans to replace some gas volumes from pipeline contracts with liquefied natural gas (LNG) to gain more flexibility in managing demand, according to its chief executive officer (CEO) on Wednesday.
The company earlier announced a 15-year agreement with Shell to purchase about 0.7 million tonnes per year of US LNG starting in 2028.
European companies are stepping up LNG purchases to gain flexibility so they can resell cargoes to other markets when demand is low.
Edison said this approach would help it to adapt to uncertain consumption trends in Italy and across Europe.
Edison CEO Nicola Monti said the group had two pipeline contracts that would expire in the next two years – one from Algeria for about one billion cubic metres a year and another for around 4.4 billion cubic metres, partly from Libya.
“We will probably reduce the overall volumes from these two contracts, with the intention of replacing those volumes with more LNG,” Monti told Reuters, adding that the Shell contract was part of this strategy.
He said the best strategy for the company is to be more flexible with LNG, “able to either move that gas to the Italian or European market, or to divert volumes to emerging economies”.
The agreement signed with Shell follows another long-term gas contract with US group Venture Global LNG. Since Venture Global started shipping gas last April, deliveries have been regular, Monti said.
But Edison has been pursuing an arbitration case against Venture Global for allegedly failing to start delivering LNG shipments in late 2022, when Europe was grappling with Russia’s invasion of Ukraine.
Monti said Edison expected the case to be decided by year-end.
Venture Global has denied the allegations and said in August that it expected to win all the pending arbitration cases. — Reuters
