Italy Government ready to back Eni in gas deal renegotiations
BY LIAM MOLONEY AND DOMENICO LOFANO
ROME -- The Italian government is ready to support the country's biggest energy company, state controlled Eni, to renegotiate the price of its long term natural gas supply contracts, Industry Minister Corrado Passera said, as it seeks to lower energy costs.
I clearly told Eni to do what is possible to go to arbitration over its long-term gas contracts, but it is a company choice, said Mr. Passera, adding the contracts "need to be revised" at a press conference in Rome to present the consultation document on the country's new energy policy.
Western European energy companies have pushed to renegotiate existing long-term gas supply deals to reduce the price link to high oil prices as these have made them unprofitable in recent years. At the start of October, Industry Ministry Undersecretary Claudio De Vincenti said the government wanted to push for imported gas prices to be linked to spot prices rather than today's indexation to oil, adding that the switch wasn't expected to be immediate.
Last week, Eni Chief Executive Paolo Scaroni said the company is considering not renewing its take or pay gas supply contracts, adding that the government needed to "stand behind Eni to allow it to modify contracts." The Rome-based company's Norwegian and Dutch take or pay gas contracts are expiring, while it is renegotiating the ones with Russia and Algeria, Mr. Scaroni added then.
Dow Jones Newswires