March 6, 2012 / 12:25 PM / in 7 years

Red tape pushes BG Group to shelve Italy LNG plant

MILAN, March 6 (Reuters) - UK gas producer BG Group has shelved a plan to build a liquefied natural gas (LNG) import terminal in southern Italy in frustration after failing to get final permits following an 11-year process of seeking approvals.

BG Group first asked for the authorisation to build an 8 billion cubic metre LNG terminal in the southern Italian port of Brindisi in 2001. The project, backed by the British and Italian governments, has turned into a red tape nightmare after it ran into fierce grass-roots opposition.

“It is impossible to think that a big multinational company would have a project blocked for 11 years. There is a limit to everything,” BG Italia head Luca Manzella told Italian daily Il Sole 24 Ore in an interview on Tuesday.

“The parent company, disappointed and discouraged by an endless standoff with Italian authorities ... has decided to reconsider from the basis the feasibility of the investment,” he said.

BG’s decision highlights Italy’s difficulties in attracting much needed foreign investment. Companies must confront an extensive and complicated bureaucracy and a deep-rooted “not in my backyard” culture, which are also now blocking construction of a high-speed train link between Italy and France.

Italy badly needs funding of energy infrastructure projects as it tries to ease its dependence on Russia for its gas supplies. The Italian government already gave its backing to the BG project in the middle of 2010.

Local opponents say the LNG terminal is not safe, would add to air and water pollution and hinder tourism in the port of Brindisi. Local-level approval is necessary for all big infrastructure projects in Italy.

BG’s patience ran out after waiting for final approval of the crucial environmental impact assessment (EIA) from local authorities.

BG, which has already spent 250 million euros ($330.8 million) on preliminary work for the plant, could backtrack if problems with winning the environmental permit and other legal issues were resolved, BG Italia told Reuters.

Italy, with scarce natural resources, relies on imports to cover more than 80 percent of its gas needs.

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below