Eni risks huge losses as Russia ‘scraps’ gas deal

Russian President Vladimir Putin on Monday suggested the South Stream gas deal with Europe is to be scrapped, putting a multi-billion investment from energy company Eni at risk.

Eni risks huge losses as Russia 'scraps' gas deal
Russian President Vladimir Putin suggested the gas project won't be completed. Vladimir Putin photo: Shutterstock

Plans to construct a 2,500km-pipeline to channel Russian gas to Europe may come to a standstill, Putin suggested during a press conference on Monday in Istanbul.

“If Europe doesn’t want to carry out [the project], it won’t be carried out,” he was quoted as saying in Il Sole 24 Ore.

Alexej Miller, CEO of Russian energy company Gazprom, reportedly went a step further and said “the project is finished”.

The Russians’ comments put the future of the project in doubt, following already strained relations over Moscow’s involvement in the Ukraine conflict.

Italy energy giant Eni holds a 20 percent stake in South Stream, while Gazprom has a 50 percent investment. The remainder is equally shared between Germany’s Wintershall and French company EDF.

On Tuesday morning Eni had not yet made a statement responding to Putin's comments.

Despite economic sanctions being imposed against Russia, Italy's undersecretary for European politics earlier this year backed the South Stream project.

Sandro Gozi said the pipeline “would improve the diversification of gas routes to Europe,” as the EU would no longer have to rely on channels through Ukraine.

Economic Development Minister, Federica Guidi, however said South Stream “is no longer on the priority list” for the Italian government, Il Sole reported.

READ MORE: Italy backs controversial Russian gas pipeline

Italy currently relies on Russia for around 31 percent of its gas supply, while in Germany this rises to 38 percent.  

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Italian monuments go dark in protest against energy bill hike

Monuments across Italy, from Rome's Capitoline Hill to the Ponte Vecchio in Florence, will go dark on Thursday evening in a symbolic protest by municipal authorities against soaring electricity costs.

Italian monuments go dark in protest against energy bill hike

The ANCI association of Italian communes estimates bills will rise by at least 550 million euros (around $630 million) for local councils, out of a total annual electricity expenditure of 1.6-1.8 billion euros.

“The increase in bills is a burden and puts families and institutions in serious difficulty”, with many already struggling due to the coronavirus pandemic, Rome Mayor Roberto Gualtieri said in a statement.

READ ALSO: Electric bills in Italy set for record 55 percent rise from January

He is switching off the lights of the Capitoline, Rome’s town hall, for an hour from 8:00 pm (1900 GMT).

In Florence, the Palazzo Vecchio, Ponte Vecchio and Palazzo Medici Riccardi will be turned off for 30 minutes at the same time.

Similar action is planned in Milan, Turin, Bologna, Pisa and others as part of the ANCI-organised initiative.

ANCI chief Antonio Decaro said government support so far is not enough.

Prime Minister Mario Draghi’s government has so far pledged 5.5 billion euros to help households and businesses with soaring electricity and gas bills.

Draghi on Wednesday said the government was preparing a further “far-reaching intervention in the coming days”.

READ ALSO: Italy ups financial aid as energy costs soar again

Beppe Sala, the mayor of Milan, said his city already used many LEDS.

“There’s not much more we can do (to reduce costs) other than to reduce the lighting,” he said.

The temporary blackout was intended to “give a message to the government”, he said.

Energy prices have soared over the past year and Italy is heavily dependent on imports to meet its oil and natural gas needs.

According to a study by S&P Global Ratings, cited by La Stampa daily, the rise in electricity will cost at least 35 billion euros extra for the country in 2022.