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11 April 2008 - Enel, the Italian electricity company, has signed a deal with Egypt's national energy company to take stakes in gas fields and a liquefaction plant, in a bid to ease concerns about a looming crisis in Italy's energy market, reports the FT.
The deal, signed in Cairo, is the latest move by a utility to secure its gas supplies with equity investments, a strategic objective for many European companies. Gaz de France, RWE and Eon of Germany, and Centrica of the UK have invested in upstream assets from Russia to Trinidad.
The details of Enel's deal have yet to be finalised, but it is aiming to take about 2bn cubic metres of gas per year. The company needs about 13bn cubic metres of gas for the Italian energy market, of which it burns about 6bn for power stations and sells the rest.
Gianfilippo Mancini, Enel's head of generation and energy management, said: "The idea is to secure and integrate our presence in the gas business through securing supplies and equity assets." Enel will take a stake in an Egyptian liquefaction plant as well as one or more gas fields, for an investment put at "hundreds of millions" of euros.
In exchange, Egas, the Egyptian state-owned energy company, will be helped by Enel to enter the Italian gas market.
Fulvio Conti, Enel's chief executive, warned in an interview with the Financial Times last year that Italy was in danger of having to cut electricity supplies because of a shortage of gas.
However, Enel hopes that its planned LNG terminal in Sicily will win approval for its environmental impact assessment from the Italian government.
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