Italy faces critical winter if Russian gas halted now

Speaking in parliament, Cingolani said moves to find alternative supplies and cut gas consumption would allow Italy to end its reliance on Russia by the second half of 2024. But he said the measures needed to be phased in over time and warned a halt this month to Russian flows would create a serious problem for filling storage sites ahead of winter.

Italy is working to wean itself off Russian gas but would face a critical winter if Moscow cut supplies immediately, Italy's ecology transition minister Roberto Cingolani said on Tuesday.

Italy, which sources about 40% of its gas imports from Russia, has been scrambling to diversify its energy supplies as the conflict in Ukraine escalates. Speaking in parliament, Cingolani said moves to find alternative supplies and cut gas consumption would allow Italy to end its reliance on Russia by the second half of 2024.

But he said the measures needed to be phased in over time and warned a halt this month to Russian flows would create a serious problem for filling storage sites ahead of winter. He said such a scenario could lead to a shortfall of 10-15 billion cubic metres (bcm) of gas in January and require "much harsher" savings measures.

"It would be important to maintain Russian flows until the end of 2022 to be able to confront winter and allow a gradual withdrawal from Russian supplies," Cingolani said. Italy, which last year used 76 bcm of gas, has tapped countries including Congo, Angola, Algeria and Qatar to try to replace the 29 bcm it gets from Russia.

Earlier on Tuesday, Prime Minister Mario Draghi said Italy was ideally situated to play a role as bridgehead into Europe for gas from Africa and the Middle East. Cingolani said under deals made with producing countries Italy would receive 12 bcm of new piped gas and 12.7 bcm of new liquefied natural gas by 2025.

Italy only has three working LNG terminals and is in talks to acquire two floating LNG ships to beef up capacity. "It is crucially important that the first floating terminal starts operating by the start of 2023," Cingolani said.

The minister was speaking a day after Rome unveiled a 14 billion euro ($14.8 billion) package of measures aimed at shielding firms and families from surging energy costs. He said the idea of introducing a national price cap on gas in Italy would be "extremely difficult", adding such a move needed to be done at the European Union level.

He said a cap of 80 euros per megawatt hour could lead to energy bills being cut by around a quarter. ($1 = 0.9469 euros)

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