Eni signs major gas project deal in Libya

Italy's Eni and Libya's state-owned NOC have signed a long-delayed deal on the development of a major offshore gas project which will supply the domestic market and boost exports to Italy.

The $8bn Structures A&E project is the largest single investment in Libya's upstream sector since the 2011 civil war and, according to Eni, the first major project in the north African country since 2000. The deal, previewed last week in a local TV interview with NOC chairman Farhat ben Gudara, was officially signed on 28 January during a visit to Tripoli by Italy's prime minister Giorgia Meloni.

The project involves developing two offshore gas fields, with the platforms tied back to existing treatment facilities at the onshore Mellitah Complex, which is operated by Eni and NOC's Mellitah Oil and Gas joint venture. Eni said previously that the project will have the capacity to produce 760mn ft³/d of gas and 47,000 b/d of liquids, primarily condensate. It said in October that production could be online in 2024, but its latest statement says output from the fields will start in 2026 and reach a plateau of 750mn ft³/d.

The project also includes the construction of a carbon capture and storage facility at Mellitah, in line with Eni's decarbonisation strategy and Libya's nascent decarbonisation ambitions.

NOC's Ben Gudara said the deal is a "clear indication that the oil sector in Libya is free of risks" and that his country is on its way back to being considered a reliable oil and gas producer. Libya's decade-long political quagmire has not only hampered new oil and gas projects from getting off the ground but has also frequently led to existing output being shut down for political purposes. The relatively safe location of Structures A&E offshore Tripoli makes the project less vulnerable to disruption than Libya's onshore fields.

The agreement comes against the backdrop of Italian prime minister Meloni's "Mattei plan", which seeks to deepen Italy's energy and political ties to Africa. Italy, alongside other European countries, has been scrambling to strengthen its energy security since Russia's invasion of Ukraine in February 2022.

By Bachar Halabi