Algeria, Italy, and BASF to Fund Feasibility Study on Subsea Pipeline

Italian electricity giant Enel, Algerian state Sonatrach, and BASF's oil and gas unit Wintershall have teamed up to fund a feasibility study on a subsea pipeline from El Kara on Algeria's northeast coast directly to the Italian island of Sardinia. The planned capacity of the pipeline is substantial, with reports indicating a capacity of 10 billion cubic meters per year, translating to 967 million cubic feet per day. While the feasibility study is at a preliminary stage, funded 50% by Sonatrach, 35% by Enel, and 15% by Wintershall, the prospects for such a pipeline remain uncertain. The study is a significant development, especially considering Italy's growing demand for gas.

Key Takeaways:

• The feasibility study is funded by Sonatrach (50%), Enel (35%), and Wintershall (15%) to assess the viability of a subsea pipeline from El Kara in Algeria to Sardinia in Italy.
• The proposed pipeline has a planned capacity of 10 billion cubic meters per year, equivalent to 967 million cubic feet per day.
• The prospects for the pipeline are uncertain, despite the study being a step towards potential implementation.
• Enel had previously announced plans to either build a subsea pipeline from Algeria to Sardinia or two LNG import terminals, but not both.
• Enel has agreed to buy an additional 2 billion cubic meters of gas from Sonatrach, increasing Italy's total Algerian gas purchases to 6 Bcm.
• A senior Sonatrach official disputed the new gas sale commitment, potentially due to pressure from Enel to advance on the pipeline project.
• The project's scope is unclear, with uncertainty over whether the pipeline will serve only Sardinia or extend to the mainland.
• Sardinia's power distribution is currently based on coal and oil, with minimal connection to the Italian gas grid.
• BASF's involvement in the project may lead to expanded sales in Southern Germany, contingent on the pipeline's extension to Northern Italy.

Statistics:

• 10 billion cubic meters per year: planned capacity of the subsea pipeline
• 967 million cubic feet per day: equivalent daily capacity of the pipeline
• 50%: Sonatrach's funding share in the feasibility study
• 35%: Enel's funding share in the feasibility study
• 15%: Wintershall's funding share in the feasibility study
• 2 billion cubic meters: additional gas Enel agreed to buy from Sonatrach
• 6 Bcm: total Algerian gas purchases by Italy
• 2 Bcm: Enel's previous gas purchases from Sonatrach

Sources:

• WGI (Oct.24, p3)
• WGI (Oct.31, p8)
• WGI (Jul.25, p3)