Online magazine highlighting research, news and analysis covering the European Neighbourhood

“A very delicate time for Libyan – Italian energy cooperation”

Francesco Sassi, a Research Fellow Energy Geopolitics & Markets at Ricerche Industriali ed Energetiche in Bologna, takes a closer look at the 🇹Greenstream pipeline, connecting Libya to Italy and one of the key route for trans-Mediterranean gas trade, which “has stopped working”.

He notes: “During May 2023, the Mellitah gas complex will undergo extensive maintenance. This is a very delicate time for Libyan – Italian energy cooperation.”

He adds: “The Libyan National Oil Corporation (NOC), the state-owned company has asserted that after several delays, the Mellitah complex will be stopped. Restructuring operations are necessary also for both the Bahr Es Salam Field and Wafa Field. These two fields are considered fundamental by NOC in order to supply the🇱🇾domestic market. Their declining production will begin in 2025 and without renovation or alternative investments, the🇱🇾market will be undersupplied, adding the risks of gas shortages. According to NOC, such an event would require🇱🇾, a country with large gas reserves in North Africa and a natural gas exporter to🇪🇺Europe, to import increasing amounts of gas for securing the supply to its power plants. It is very interesting that NOC asserted this in the weeks ahead of the🇱🇾🇮🇹agreement signed in January between Libya’s NOC and Italy’s ENI. The ceremony was attended by both🇮🇹PM Meloni and Libyan PM Dbeibah. Worth around $8 billion, the investment in two offshore gas fields in the Mediterranean Sea is the biggest foreign energy investment in Libya in more than 25 years.

He continues:

“Energy interdependence is key for Italian-Libyan cooperation. The development of the Structures A and E is planned to produce the first gas in 2026, a key asset for both the diversification of🇮🇹gas imports away from🇷🇺Russia,the largest supplier until 2021, and transform🇮🇹in a Mediterranean gas hub. During her recent visit to🇪🇹Ethiopia,🇮🇹PM Giorgia Meloni announced an energy cooperation plan (called ‘Mattei Plan’) with Africa to be presented in October, aimed at connecting🇪🇺to🌍Africa through Italy to announce Africa energy cooperation plan in October, Prime Minister Giorgia Meloni said on Friday during a visit to Ethiopia.

The current maintenance at the Mellitah complex, shut several times in these last months due to technical failures, meaning no🇱🇾gas for🇮🇹in these periods, will be a first test for🇮🇹ambitions in North Africa. In April,🇮🇹ENI North Africa said works will be carried out until May 24. So far,🇮🇹imports from🇱🇾have been 22% higher than in 2022, a positive signal which came despite the January outage at Mellitah, reducing the exports for several days.

🇱🇾gas exports to🇮🇹have been declining for years. Only a fraction of the 45 mcm/d Greenstream pipeline is utilised. Not to say that possible delays of🇮🇹ENI’s investments in🇱🇾Libya could trigger a domino effect on the domestic supply of gas, generating shortages for the🇱🇾population and a possible further reduction of gas flows to🇮🇹 However, the bilateral cooperation is not just energy-oriented.”