BG Hopeful on Brindisi LNG (Italy)

BG Group found reason to hope this week that it is making progress toward ending its eight-year battle to build an 8 Bcm/year LNG import terminal at the southern Italian port of Brindisi, BG spokesman Neil Burrows said Thursday.

The project has been in a state of limbo for years as BG struggles to overcome numerous hurdles, including vehement opposition by some local authorities and a criminal investigation into allegations of improper conduct related to the authorization process.

On Wednesday, Italy’s Ministry of Economic Development held a conference to bring officials of various ministries together to discuss progress, as the project enters the last phase of the government authorization process.

“The outcome from this was positive as both the Ministry of Industry and Ministry of Environment expressed commitment to resolving the issue and were clear that this process was a reconfirmation of an existing license and not a new license process,” Burrows said.

“This should help with speed of progress, but we have no set timetable as yet,” he added.

Italy’s Environment Ministry last year approved the environmental decree for the Eur500 million terminal.

BG still maintains it secured valid final authorization in 2003. But in 2007, the Italian government said it would revoke the approval because local residents had not been properly consulted and for other reasons.

Terminal work started after BG received approval in 2003, but it was halted in 2007 after Italian police arrested the chairman and two former managers of BG’s Italian operations over alleged bribes related to the project.

In February 2007, Italian officials seized the Brindisi LNG site in connection with a criminal investigation into allegations of improper conduct related to the authorization process.

Burrows said Thursday, “the project is still on hold as we continue to pursue the release of the site.” He said the company continues to complete needed project preparations and hopes to secure a second conference of services in the first half of next year.

A construction timetable depends on site access, he said. “We will keep the schedule under review and not comment on timings until we have re-gained site access.”

BG originally planned to start terminal operations in 2007, but later changed that date to 2010.

Project details, including the Eur500 million cost and 8 Bcm/year capacity, have not changed in the last year, Burrows said. BG will have the rights to 80% of capacity on a priority basis, while the rest will be subject to regulated third-party access. The terminal could receive LNG from the Mediterranean and Atlantic basins and also the Gulf states.

(platts)

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Source: platts, December 2, 2011; Image: bg