Italy as the new Gas Hub for Europe. Here’s how Rome moved Germany aside

Lorenzo Bagnato

2 December 2022 - 17:33

twitter whatsapp

Italy is on the right path to become the next European gas hub sidestepping Germany. Let’s dive into this major geopolitical change.

Italy as the new Gas Hub for Europe. Here's how Rome moved Germany aside

In 2019, Italian news outlet Sole 24Ore declared that Italy had lost the gas race in Europe. Germany, according to the article, was the indomitable winner, doubling the Nord Stream pipeline with Russia and dictating prices for the whole continent.

Three years later and the tables have turned. Russia has invaded Ukraine, starting the worst conflict in Europe since WWII. Both Nord Stream pipelines lay broken on the Baltic seabed, probably sabotaged. The EU is talking about implementing a price cap on Russian gas, something that Germany herself has already done.

Germany is without Russian gas and is facing its worst geopolitical crisis in decades. It is unlikely that they will keep their position as European gas hub, at least for the years to come. Italy, with its presence in the middle of the Mediterranean sea far from the Russian border, can take the vacant seat left by Germany.

The possibilities are surely there, but the real question is: will the government take the initiative when it still can?

How can Italy become the next gas hub

Italy currently has three gas pipelines “landing” on the south of the peninsula. Mazara del Vallo and Gela in Sicily and Melendugno in Apulia.

The position of these pipelines is crucial to understand the real geopolitical advantage Italy currently holds: each one of them comes from a different country. Italy has highly diversified its gas portfolio, obtaining it from the Middle East (Turkey, Azerbaijan), North Africa (Egypt, Libya, Algeria) and Sub-Saharan Africa (Angola, Congo).

And that’s without taking into account the Italian LNG terminals. They are industrial ports where Liquid Natural Gas (LNG) can be reduced to its natural form again and sent into the pipelines.

Italy now has three LNG terminals with several others under construction. For comparison, Germany just opened its first LNG terminal this year.

By next year, a new LNG terminal should be operating in Ravenna and another in Piombino. The latter, however, has received strong backlash from the local population which might slow down or even completely terminate the project.

Italian imports of Russian gas have been 99% less compared to last year. Claudio Descalzi, CEO of the largest energy company in Italy, has said the country will be completely free of Russian gas by 2025.

The current Italian government under Giorgia Meloni will have to act firmly and quickly to secure the country’s position as the European gas hub. Such a shift is expected to help Italy better transition to renewable energies as well.

But Italian politics is notoriously unstable. Its governments rarely last more than two years, and the opposition of the local population to such projects (like in Piombino) is a recurring theme.

Though, if things continue like this, it really seems that all pipelines will lead to Rome.


# Italy

Trading online

Fai Trading Online senza rischi con un conto demo gratuito: puoi operare su Forex, Borsa, Indici, Materie prime e Criptovalute.