Italy ready to use gas stocks

Author: 
REUTERS
Publication Date: 
Wed, 2011-02-23 01:31

The prospect of further disruption to oil supplies from Libya, Africa's third-largest producer, has sent oil prices to a 2 1/2 year high above $108 a barrel. Unrest has already shut down 6 percent of Libyan oil output.
Libya is Italy's biggest oil supplier and covers about 10 percent of its natural gas needs. Gas moves to Italy from Libya through the underwater pipeline Greenstream, which is controlled by ENI.
"Supplies have not been interrupted, but the situation is very complicated," Italy's junior minister in charge of energy, Industry Undersecretary Stefano Saglia, told a conference on Tuesday.
Saglia said the security committee for gas supplies had already been alerted in case flows were interrupted, adding that ordinary and strategic stocks would then be used.
"So there should not be a problem," he added.
Libya pumps about 1.6 million barrels of oil per day (bpd) equal to about 1.9 percent of daily global output. Its crude oil mostly heads to Europe and is of high quality.
Operations at Libyan oil ports were disrupted by a lack of communications, trade sources said, and flows from marine oil terminals in Libya were halted on Tuesday, an Italian government source said.
"The situation is worrying. This morning the oil terminals were blocked in Libya," the government source said.
It was not possible to get through by phone to Libyan oil ports or shipping agents on Tuesday.
"Everything is out," said a source with a major oil company. "We can't get through to anyone. Our operations people say contact is impossible with the shipping agents, port officials, anyone. The lines are all down."
The Libyan unrest has already prompted Wintershall, a unit of BASF, to wind down Libyan oil production of as much as 100,000 bpd and a number of firms including BP and Royal Dutch Shell to pull out international staff.
Any halt in Libyan oil supply would leave a difficult hole to fill on world markets, analysts say, because while other members of the Organization of the Petroleum Exporting Countries are able to pump more oil, the extra supply would probably be of lower quality to Libyan crude.
Natural gas flows from Libya into Italy through the 510 km Greenstream pipeline have been slowing since late Monday, and the situation is worsening, Italian energy publication Staffetta Quotidiana said, quoting sources close to the situation.
Gas import flows through Sicily's terminal of Gela, part of the Greenstream pipeline complex, stood at 25.8 million cubic meters on Feb. 20, according to the latest data from Italy's gas network, Snam Rete Gas.

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