Libya’s state-owned National Oil Corp. is set to ink a gas deal with Italy’s Eni (ENI.MI). NOC head Farhat Bengdara confirmed the report and said the deal will see a sum of US $8bn spent on producing 850 MMcf/d from two offshore gas fields in the Mediterranean Sea.
The deal also involves the renewal of an existing agreement originally struck in 2008. Eni already produces gas in Libya from its Wafa and Bahr Essalam fields operated by Mellitah Oil & Gas, a joint venture between the Italian company and NOC. Gas from the fields is brought to Italy through the 520-km (323-mile) Green Stream pipeline that crosses the Mediterranean Sea to Gela in Sicily and has the capacity to carry 8 billion cu m/year. Eni produced 198 Bcf of gas in Libya in 2021.
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Italy is trying to diversify its sources of gas following the reduction of Russia supplies to Europe in the wake of Moscow’s invasion of Ukraine Under a government target to eliminate Russian gas by 2025, Italy is working on a number of short- and mid-term measures to boost LNG and pipeline flows from other sources.
Libya is also trying to woo back international oil companies to explore for gas and oil, particularly offshore, after lifting in December a force majeure on exploration and production agreements. Russian oil company Tatneft recently resumed upstream work in the Ghadames Basin. NOC is now hoping to court more international oil companies like BP, Eni, TotalEnergies, ConocoPhillips, OMV and Repsol to resume upstream work in the country.
Currently, Libya is trying to maintain gas producing at 1.5 Bcf/d, with about 850-900 MMcf/d used locally for electricity production, 250 MMcfd/ exported and the remainder consumed mainly in industry. The country also wants to woo foreign investments to help lift oil and condensate production from 1.255 million b/d now to around 2 million b/d in three to five years.