Why Eni will break with Gazprom
Eni wants to sell its stake in Blue Stream, the joint venture with Gazprom on the pipeline to Turkey. It is not the only energy company to have detached itself from Russia after the attack on Ukraine: this is what ExxonMobil, Bp, Total, Shell Equinor and Orsted do
Yesterday Eni announced that it intends to sell its stake in the Blue Stream gas pipeline, which transports natural gas from Russia to Turkey, under the Black Sea. It was built by Blue Stream Pipeline BV, the 50% equal joint venture between Eni and the Russian state-owned gas company Gazprom, which also deals with the sale of Russian gas on the Turkish market.
The infrastructure has a transport capacity of 16 billion cubic meters per year.
ENI: “MARGINAL” PRESENCE IN RUSSIA
Eni recalled that its joint ventures with Rosneft, a Russian oil company, were frozen following the international sanctions imposed on Moscow in 2014, the year of the annexation of Ukrainian Crimea. “Eni's current presence in Russia is marginal,” the company told Reuters .
WHAT ENI DOES IN RUSSIA
Eni has been operating in Russia since the 1960s, and is currently active in the retail and wholesale market for lubricants through its subsidiary Eni Nefto, which has a service station in Moscow.
Eni also holds long-term contracts for the supply of Russian gas: in 2020 it purchased 22.49 billion cubic meters.
THE OTHER ENERGY COMPANIES THAT DETACHED FROM RUSSIA
Eni is not the only energy company to have detached itself from Russia after the imposition of sanctions for the invasion of Ukraine.
France's TotalEnergies, for example, has said it will no longer finance new projects in the country.
British BP gave up its 19.7 percent stake in Rosneft.
Shell of the Netherlands has announced the exit from all its operations in Russia, including the Sakhalin 2 LNG liquefied gas plant, owned by Gazprom; Shell has a 27.5 percent stake.
The Norwegian Equinor will start the process of detachment from its joint ventures in Russia: only last year it had reached a strategic cooperation agreement with Rosneft.
Denmark's Orsted has canceled purchases of coal and biomass from Russia, which it uses as fuel in its power plants. However, it will continue to source natural gas, as foreseen in the long-term contract signed with Gazprom (2 billion cubic meters per year), but has specified that it will not sign new agreements with Russian companies or companies that rely on Russian suppliers.
Finally, the US company ExxonMobil will withdraw from its hydrocarbon operations in Russia (worth more than 4 billion dollars: the Sakhalin plants are particularly important) and will block new investments.
ITALY DETACHES ITSELF FROM ARCTIC LNG 2
In response to Russia's invasion of Ukraine, Italy suspended its share of funding for the Arctic LNG 2 liquefied gas project, developed by the Russian gas company Novatek. Insured by SACE (the export credit agency of the Cassa Depositi e Prestiti group), the loan amounts to 500 million euros.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/perche-eni-rompera-con-gazprom/ on Wed, 02 Mar 2022 12:56:36 +0000.