Angelo Amante and Stephen Jewkes

MILAN (Reuters), -Italy’s largest utility Enel (MI:) will scrap plans for a LNG terminal to be built in Southern Italy. Rome is stepping up efforts to locate alternative sources to Russian gas.

It will be part of an Italian effort to reduce dependence on Russian gas. Roberto Cingolani, Energy Transition Minister, said Tuesday that Italy wants to be free from Russian gas imports in 24-30 months.

Enel commented to Reuters Tuesday, saying that Italy should have two more LNG terminals to reduce dependence on the gas pipelines.

Enel stated that it was allowing the Porto Empedocle LNG project to be resumed because of this.

It has intensified its efforts to find alternative sources of gas since Russia’s invasion of Ukraine. The focus is on Qatar, which is LNG rich.

According to industry sources, it could take over three years to construct a facility like Porto Empedocle, which was originally intended to produce 8 billion cubic meters per year.

They had cancelled this project (Porto Empedocle), at the beginning of the year, because it wasn’t sustainable. “Now they have resurrected them,” Sicily Energy Manager Daniela Baglieri stated to Reuters.

Italy’s byzantine permitting process has virtually stopped development of LNG facilities beyond the three plants currently operative and which now account for around 20% of daily imports.

RACE AGAINST THE TIME

Italy imports almost 90% of its natural gas, and Russia piped in around 40%.

Other pipelines connect it to Libya, Azerbaijan and Libya. Analysts say that the issue with the pipelines is not their underuse, but the chronic underinvestment of recent years has resulted in a lack of gas to fuel them.

The world could see an increase in demand for gas if Russia extends sanctions to oil and Russia chooses to stop supplies to Germany via Nord Stream 1.

Rome, which has the resources and time to increase upstream gas production is eager to grow its LNG infrastructure, is searching for at least one floating terminal (or FSRU).

Cingolani stated Tuesday that Italy would install a new FSRU in the middle of next year.

Sources familiar with the situation said that Eni, the energy company, and Snam the gas infrastructure group were asked to coordinate logistics. They also looked for the FSRU charter.

The competition is fierce. Source said that Italy, Germany, as well as at least one other European nation are on the market searching for FSRUs.

European nations are looking to develop LNG facilities in order to decrease their dependence on Russian gas. Germany announced plans Saturday for its terminal.

Snam and Eni declined to comment.

Snam is the operator of most of Italy’s gas storage businesses and has stakes at all three LNG terminals that are currently operating in Italy. Eni operates a vast global LNG business.

It is Eni, Snam, and Enel’s largest shareholder.