The Clouds over the Russian-Italian Relations

ENI is the largest Italian company and one of the largest energy companies in the world. The Italian public is ENI’s largest shareholder and it holds a 30% golden share of its stocks. Golden shares are shares that give certain privileges which cannot be undone even by majority voting. These privileges are of course determined in advance. An example could be that the company cannot be controlled by a foreign company etc.

The Italian-Russian relations are to a large extent determined by the Gazprom-ENI relations. The Russians offered ENI partnership in the Blue Stream pipeline, which carries Russian natural gas to Turkey through the Black Sea. The state owned Turkish energy company BOTAS is also a partner of the Blue Stream pipeline. Putin also gave ENI a 20% share in the South Stream pipeline, as you can read at the following Euractiv article titled “Gazprom buys South Stream shares from Eni, EDF and Wintershall”, March 2015. The French state owned Electricite de France and the German private company Wintershall were holding the remaining 30% share of South Stream.

Map 1

Map of Europe

I must say that the energy sector in Germany is run by the private sector and that’s why Putin did not give the German share to a state owned German company. The big German energy companies are all private. However that does not mean at all that the German politicians do not care whether the gas is passing through Germany or someother country.

By giving Italy large stakes in her pipelines Russia managed to have Italy on her side on the struggle against the EU antimonopolistic regulations, which require the open up of the energy market i.e. the Third Energy Package. With the Nord and South Stream Russia was keeping a balance between Germany and Italy, because the Germans had the big stakes in Nord Stream and the Italians had the big stakes in the South Stream. The Russians also gave the French smaller stakes in both pipelines, even though the French are mainly using nuclear power.

By canceling the South Stream and signing the agreement for Nord Stream 2, Russia is putting all the weight on Germany. ENI is not included in the agreement for the Nord Stream 2 pipeline and that cannot be an accident. However Putin offered a percentage of Nord Stream 2 to the Anglon-Dutch Shell, trying to lure the British, since the Dutch were already involved in Nord Stream 1. The English natural gas production is falling, and England imports more natural gas than she is producing, and at the same time the English see the Dutch and Norwegian production levels falling. The English have made some deals with the Qataris for the provision of LNG, but they are also considering the Russian gas.

The agreement about Nord Stream 2, which includes Royal Dutch Shell, is coming after Centrica’s agreement with Gazprom, as you can read at the following Independent article, titled “Gas imports from Russia’s Gazprom giant to soar after new Centrica deal”, May 2015. The article mentions that Great Britain needs approximately 70 billion cubic meters of natural gas every year, and Centrica has agreed to purchase 4.1 billion cubic meters of gas every year. Centrica is one of the largest natural gas and electricity suppliers in the UK, and in England and Wales it operates under the name British Gas, while in Scotland it operates under the name Scottish Gas.

The late Russian moves are likely to improve Russian-English relations but they will hurt the Russian-Italian ones. The Italians are already connected to Libya through the Green Stream pipeline, which was inaugurated in 2004 by Qaddafi and Berlusconi, and they are also connected to Algeria with the Trans-Mediterranean pipeline (Algeria-Tunisia-Italy). Moreover the Algerians and the Italians are planning the GALSI pipeline (Algeria-Italy). Moreover the Nigerian gas can go to Europe through Italy and Algeria if the Trans-Saharan pipeline manages to pass from the Islamic State’s affiliate Boko Haram.

Map 2

Map Boko Haram

In addition ENI discovered in Egyptian waters the largest natural gas field of the East Mediterranean Sea. Zohr holds 840 billion cubic meters of natural gas, and it is even larger than Israel’s Leviathan, which holds 500+ bcm of gas. ENI can send Zohr’s gas to Italy and Europe. Therefore for Italy not to decide to play the very important role she can play for Europe’s energy security, Gazprom would have to pay very big money, and apparently the agreement for the Blue Stream pipeline, which carries 15 billion cubic meters of gas to Turkey, is not enough. The South Stream would carry 63 bcm of gas every year. A great article about the problems that might arise in the Russian-Italian relations is “ENI’s Gas Discovery in Egypt Puts Pressure on Italian-Russian Energy Ties”, September 2015, from the American think tank Jamestown Foundation.

The way the Italians are putting pressure on the Germans in order to force them to take in more Muslim immigrants is not an accident. The Italians know that a rise of Islamism in Germany will reduce the safety of the Russo-German pipelines and will increase Italy’s importance. Of course this is not the only reason for their stance on the immigration issues. All red European socialists worry about the rise of national socialism. The hundreds of thousands of Muslim refugees that the red socialists are bringing in Europe will make sure that it will be much harder for nationalists to gain power, because immigrants always vote for the left.

Of course there is also a lot of money involved in immigration. The rich Muslim countries are paying lots of money to increase the Muslim populations in Europe, and they also spent lots of money to build Mosques, in order to increase their influence.

Richest Countries in Natural Gas

Picture 3

Richest Countries in the World in Natural Gas Reserves

“ENI’s Gas Discovery in Egypt Puts Pressure on Italian-Russian Energy Ties”, September 2015

http://www.jamestown.org/programs/edm/single/?tx_ttnews%5Btt_news%5D=44373&tx_ttnews%5BbackPid%5D=27&cHash=aa96876e7409fa1b6fe7efb349238b09#.Vfp3Ot-qqko

“Gazprom buys South Stream shares from Eni, EDF and Wintershall”, March 2015

http://www.euractiv.com/sections/energy/gazprom-buys-all-south-stream-shares-eni-edf-and-wintershall-313411

“Gas imports from Russia’s Gazprom giant to soar after new Centrica deal”, May 2015

http://www.independent.co.uk/news/business/news/gas-imports-from-russias-gazprom-giant-to-soar-after-new-centrica-deal-10248692.html

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