May 30, 2018 / 6:52 PM / 5 months ago

Spain's Gas Natural scraps plan to build LNG terminal in Italy

MILAN/MADRID, May 30 (Reuters) - Gas Natural has given up on a long-standing project to build a liquefied natural gas facility in northern Italy after years of slow progress and the sale of its Italian businesses, the company said on Wednesday.

A Gas Natural spokeswoman said it made no sense to keep the LNG project on the company’s books when it no longer had a network and assets in Italy.

Last year, Gas Natural sold its gas distribution and retail businesses in Italy in a deal worth more than 1 billion euros ($1.16 billion).

The spokeswoman also said there had been no advances made in the project since environmental clearance had been obtained in 2009.

Red tape and grass root opposition in Italy have chased off several foreign investors in recent years seeking to build infrastructure in Italy, including BG Group which had tried to build an LNG terminal in the southern city of Brindisi.

Local opposition is currently holding up work to construct the Italian end of the Trans Adriatic Pipeline that is scheduled to bring Azeri gas to Italy in 2020.

The environment manager of the Friuli Venezia Giulia region, where the terminal would have been built, said in comments on the region’s website he was satisfied with the Spanish group’s decision.

“The decision of Gas Natural is perfectly in line with the strategic programme of the region’s current governor in the election campaign,” Fabio Scoccimarro said.

“It is a position shared also by all the political parties in recent years,” he said.

The LNG project, first presented in 2004, had envisaged the building of a regasification terminal in the port of Zaule in Trieste with a capacity of 8 billion cubic metres of gas per year.

The 5-Star Movement, the biggest party in Italy’s recent inconclusive elections, has said it sees gas playing a gradually smaller role as renewable energy and energy efficiency come to the fore. ($1 = 0.8587 euros) (Reporting by Stephen Jewkes and Andres Gonzalez Estebaran. Editing by Jane Merriman)

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