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Algeria to pull out of Italy “Galsi”gas pipeline project

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Algeria will pull out of the planned Galsi gas pipeline to Italy if Rome backs rival South Stream and Trans Adriatic Pipelines (TAP), according to Italian sources, who said the decision had been communicated to Prime Minister Mario Monti this month.

Reuters quoted Italian sources as saying; “”Algeria said that it does not see the right conditions for investment if Italy backs South Stream and TAP. That was the answer Monti got during his visit to Algiers in the middle of the month,” one of the sources said.

The version was confirmed by a second Italian official with knowledge of the case, although an industry source said the delay to the project had been caused by uncertain market conditions.
The launch of the project was expected for mid-November but the start date was delayed because of problems with securing authorisation from local authorities in the Tuscany region of central Italy, where the pipeline would come ashore.

The 8 billion cubic litre Galsi pipeline had already been delayed due to delays in obtaining the necessary permits.

Shareholders in the project include Algerian group Sonatrach as well as Italian groups Edison , Enel , Hera and Snam .

Algeria already provides Italy with around 35 percent of its imported gas, most via an existing pipeline through Tunisia and under the Mediterranean.

Italian energy giant Eni aims to start work in December on the 15 billion euro South Stream project, which will bring natural gas from Russia to western Europe via the Caspian region.

Preparations for the TAP project that will link Italy, Greece and Albania are under way with a final decision expected by the end of the year.

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