* Measures include switching on oil-fired power plants
* Eni CEO sees end to crisis next weekend
* Gas committee to meet again on Tuesday
(Adds Eni, Gas Intensive execs, comments on Algeria, Libya)
By Stephen Jewkes and Alberto Sisto
Feb 6 Italy introduced a series of
emergency measures on Monday to offset the impact of reduced
natural gas imports from Russia as cold weather bit into
supplies and sent gas demand to record high levels.
Gas supplies to the European Union from Russia improved over
the weekend but have not fully recovered, and Italy convened a
crisis committee to handle what it called critical shortages of
In a statement on Monday, the Italian Industry Ministry said
it had decided to enforce so-called "interruptible" gas
contracts with industrial clients and to switch on oil-fired
power stations to partly replace gas-fired plants.
Italy uses cleaner natural gas to fuel around 50 percent of
its power generation portfolio.
Paolo Scaroni, chief executive of Italian oil and gas group
Eni, which imports the lion's share of Italian gas
produced abroad, told Italian TV that the switch to oil-fired
plants and other measures taken by the government could generate
some 25 million cubic metres per day, or 8 percent to 9 percent
"I expect things to return to normal as of next weekend,"
Scaroni said on Italian TV.
Gas demand in Italy reached all-time highs on Sunday
following a sixth straight day of curtailed supply from Russia,
with Italian Industry Minister Corrado Passera describing the
situation as "critical."
Italy, which consumed some 78 billion cubic metres (bcm) of
gas in 2010, is 90 percent dependent on imported gas. In 2010 it
imported some 22 bcm from Russia and around 25 bcm from Algeria.
Gas imported from Libya through the Greenstream pipeline has
only recently come back on line after the conflict in the
country, with around 75 percent of pre-war flows back on tap.
According to data from Italian gas grid operator Snam
, the amount of Russian gas pumped into its network on
Monday was almost 20 percent less than the amount requested.
"Italy's dependence on (gas) imports is a problem, and the
Russian squeeze is certainly testing. But it's nowhere near as
dramatic as in the past when Russian gas imports were cut," says
Davide Tabarelli, head of energy think-tank Nomisma Energia.
The Russian-Ukraine gas crisis in the frigid winter of 2006
set alarm bells ringing across Europe and forced Italy to tap
strategic reserves. A second crisis in 2009 also affected flows.
Tabarelli said that while limited Russian imports was not an
immediate threat, cuts from another source such as Algeria, if
they occurred, would cause serious problems.
The cold spell in Europe has spread to areas of North Africa
and reports said Algeria has been hit by snow.
Italy's gas crisis committee, which is due to meet again on
Tuesday, has already called for a greater use of gas storage
capacity as well as stepping up national gas production and
alternative sources of gas imports.
Italy has some 10 bcm of working gas storage on top of 5.2
bcm of strategic reserves, which can only be tapped after a
ministerial decree. According to Snam, around 40 percent of
working gas capacity remains unused.
Gas Intensive, a gas consortium comprising 300 Italian
energy-intensive companies, said the priority should be to use
storage capacity and not enforce interruptible contracts, which
will increase costs for industry.
"The conditions do not justify, as a first move, the
interruption of supplies to companies. It seems to us a priority
to act on the reserves (storage) that are available," said the
president of Gas Intensive, Paolo Culicchi, on Monday.
Interruptible contracts allow large industrial customers to
get gas at cheaper rates, but the gas can be stopped in cases of
Bad weather has also affected the offshore liquefied natural
gas (LNG) plant at Rovigo, in northern Italy, which normally has
a capacity of 8 bcm. Energy group Edison controls the
"The LNG terminal is not fully operational. Last Saturday it
was functioning at 50 percent because of the bad weather. which
is slowing down loading operations," Edison director of
development Roberto Poti said on Monday.
(Additional reporting by Giancarlo Navach; Editing by Jane
Baird and Steve Orlofsky)