Edison, an Italian energy company but controlled by the French group Edf, announced that it has managed to replace seven of the ten liquefied gas shipments it was supposed to receive from Qatar.
THE BACKGROUND
At the end of March, in fact, the Qatari state company QatarEnergy had informed Edison of the impossibility of shipping the ten loads scheduled between April and mid-June – totaling 1.4 billion cubic meters – due to the crisis in the Persian Gulf: between the closure of the Strait of Hormuz and the Iranian attacks on its facilities, QatarEnergy had to declare force majeure, meaning the inability to fulfill contractual obligations.
HOW MUCH IS THE CONTRACT BETWEEN EDISON AND QATAR WORTH
Edison holds the largest liquefied gas supply contract with Qatar: it is worth 6.4 billion cubic meters per year, equivalent to 10 percent of Italy’s annual gas consumption. The shipments are received at the Porto Viro regasification terminal, near Rovigo.
WHERE THE SUBSTITUTE SHIPMENTS COME FROM
Six of the seven substitute shipments for those from Qatar will be delivered to Edison from the United States “and very likely the seventh as well,” reports Il Sole 24 Ore. Moreover, a new terminal recently started operations on the U.S. Gulf Coast, Golden Pass: the plant is owned by the Qatari state company QatarEnergy and the American oil company ExxonMobil.
According to Reuters, supplies from Golden Pass will arrive in Italy starting in June.
PEACE MADE WITH VENTURE GLOBAL
Even the three shipments “lost” due to force majeure in Qatar could come from America: Edison has in fact resolved the dispute with Venture Global, one of the main liquefied gas exporting companies in the United States.
– For more: Venture Global, all about the American LNG company with which Eni will gas up
Venture Global was supposed to deliver to Edison the first liquefied gas shipment from Calcasieu Pass (a large terminal in Louisiana) in 2022, but the delivery took place only a year ago: the company preferred to sell its fuel on the spot market, the wholesale and daily market, where prices are generally higher than those set in contracts.
It seems that now Venture Global will supply Edison with an additional volume of gas beyond the contracted amount: the first of these “extra” shipments should arrive in Rovigo on May 2.
WHAT EDISON’S CEO THINKS ABOUT QATAR…
According to Edison’s CEO, Nicola Monti, “it is reasonable to expect that Qatar Energy’s force majeure will be extended beyond mid-June,” considering the extent of the damage suffered by the Ras Laffan complex, which houses the largest liquefied gas export plant in the world.
Monti, however, described QatarEnergy as “a reliable supplier for fifteen years” and “has expressed the willingness to continue doing so.” “Today,” continues Edison’s head, “we do not see any critical issues in replacing the shortfall in supplies from Qatar by operating on the spot market, because there is availability of volumes, although obviously at a higher price than pre-crisis.” Edison also receives gas via pipelines from Algeria, Libya, and Azerbaijan.
– Also read: How will Italy replace Qatar’s gas?
… AND ON RUSSIAN GAS
Unlike the CEO of another major energy company – Claudio Descalzi of Eni –, Monti thinks it is not necessary to lift the ban on importing gas from Russia, which will become fully effective in autumn 2027. According to Monti, in fact, “there are sufficient options to continue sourcing from other markets.” He also believes that the current crisis is not “a structural issue” and that “in the short term it can be managed: over the next eighteen months the market will return to balance.”
Descalzi, on the contrary, thinks the European Union should review its energy policy and resume freely purchasing Russian gas to protect itself from a potential worsening of the situation in the Persian Gulf. “I think it is necessary to suspend the ban that will take effect on January 1, 2027, on 20 billion cubic meters of gas coming from Russia,” he declared in his speech at the Lega political training school.
If the Strait of Hormuz remains closed for a long time, and if the hydrocarbon producers in the region fail to restore the lost output quickly (more than a year, perhaps, considering the damage caused to their facilities by the Iranian attacks), the market would experience a gas supply deficit of about 20 billion cubic meters. “Who will produce these additional 20 billion?” Descalzi asked.
