Italy's Eni signs $8 billion gas deal in Libya

Published January 29th, 2023 - 07:36 GMT
Eni NOC deal
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ALBAWABA — Italian energy giant Eni signed an $8 billion gas deal with Libya's National Oil Corporation in Tripoli on Saturday, as Eurozone governments scramble to find alternatives to Russian gas.


Since last year's invasion of Ukraine, Russian gas deliveries have been slashed to less than half their pre-war levels, sending prices to record highs and forcing European governments into costly subsidies to help consumers deal with inflationary pressures.


“This agreement will enable important investments in Libya’s energy sector, contributing to local development and job creation while strengthening Eni’s role as a leading operator in the country,” Eni Chief Executive Officer Claudio Descalzi told Reuters.


Farhat Bengdara, CEO of the NOC, at a joint press conference with Descalzi, called the 25-year gas deal the most important new investment in Libya’s energy sector for a quarter of a century.


In a statement, Eni said it was the first major project in Libya since early 2000 and would involve the development of two offshore gas fields, expecting production to start in 2026 and reach a plateau of 750 million cubic feet per day.


"Production will be ensured through two main platforms tied into the existing treatment facilities at the Mellitah Complex," the Eni statement said. "The project also includes the construction of a carbon capture and storage facility at Mellitah, allowing a significant reduction of the overall carbon footprint."


Eni, which has an 80 percent share of Libya's gas production, expects the investment will have significant impact on the industry and the associated supply chain, allowing a significant contribution to the Libyan economy.


Mohamed Oun, Libya’s oil minister serving in Prime Minister Abdulhamid al-Dbeibah government, rejected any deal that the NOC strikes with Italy, saying in a video on the ministry website that such agreements should be made by the ministry, highlighting the power struggle between rival factions for political legitimacy.


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