Brussels, 04/02/2015 (Agence Europe) - Italy's foreign affairs and international cooperation minister, Paolo Gentiloni, has said that Italy wants to relaunch the Galsi gas pipeline project to link Algeria to Europe via Sardinia. “We are interested in the Galsi project and we back the idea of diversifying energy sources”, Gentiloni stated at a joint press conference with his Algerian counterpart, Ramtane Lamamra, in Algiers on Monday 2 February.
The gas pipeline - which is planned to have a transfer capacity of 8 billion cubic metres per year - would be important for Europe's supply, but has fallen victim to difficult circumstances over recent years and its profitability has been questioned.
The European Commission mentioned Galsi among its projects for 2020, and earmarked €120 million maximum for it before the current financial crisis. According to Algeria's press agency APS, the Algerian share in financing the Galsi pipeline would be 41.6% (through the national company Sonatrach). The other partners that have been announced are Edison, Enel, the Hera Group and the region of Sardinia.
According to studies completed in 2010, Galsi is to be built for a stretch of 900 kilometres - around 600 km of which is to be under the sea, at a maximum depth of 2,885 metres. The pipeline will be “the deepest ever completed” and will be “a great technological and engineering challenge”.
The project has been postponed three times, however - in July 2012, December 2012 and at the end of May 2013. The reason given for this is “the drop in demand for natural gas in Italy”, although in 2011 there seemed a need to increase deliveries already operated by the Transmed pipeline.
The issue of the Galsi project's profitability is also raised. The cost has increased in the meantime - rising from $2 billion to $3 billion initially, then to $4 billion in 2014, as noted by Algerian oil expert Abderrahman Mebtoul. Another obstacle is said to concern the environment. “The majority of deputies in Sardinia are currently against the project, at least along the traditional route, for ecological and other reasons”, Mebtoul adds. Rome could do nothing “due to this region's [Sardinia's] autonomy”, he predicts.
However, the main obstacle is reportedly due to the reduction in export capacity after the challenge from another trans-Saharan gas pipeline project (the Niagal project between Nigeria and Algeria), which is expected to enable annual deliveries of 20-30 billion cubic metres of gas to Europe, via Galsi. The Trans Saharian Gas Pipeline (TSGP), to be built along 4,128 km - half of which is on Algerian territory - has seen its initial cost rise from $7 billion to $15 billion or even $20 billion, according to a study quoted by Mebtoul. “This project, financed partly by Europe, is suffering geostrategic tension [in the Sahel] as well as the debt crisis”, Mebtoul states. (FB)