CAPITAL: Rome

MONETARY UNIT: Lira

REFINING CAPACITY: 2,446,218 b/cd

OIL PRODUCTION: 108,700 b/d

OIL RESERVES: 622 million bbl

GAS RESERVES: 8 tcf

Italy`s antitrust authority called for a breakup of Ente Nazionale Idrocarburi SpA`s (ENI) monopoly on gas distribution.

The authority called for a modification of ENI`s tight, integrated structure to increase pricing transparency and competition in its gas distribution network, operated by ENI-owned Snam.

Through Snam, its natural gas pipeline transportation and distribution arm, ENI, Italy`s majority state-controlled energy holding company, had a de facto monopoly on the primary distribution of gas in Italy.

Snam controlled 100% of Italian gas imports, 97% of gas transports, 100% of gas stocking facilities, and 95% of the primary gas distribution system.

The agency said competition was present only in secondary distribution, the retail sales to households and businesses, where ENI had only a third of the market through its Italgas company, while municipal utilities held a 40% market share and private companies the remaining 27%.

After a nearly 2-year study of the gas market in Italy, the authority called for a separation between ownership of the gas distribution network and marketing of gas via the network itself for primary distribution to increase transparency and competition.

The Italian government said it would retain control of state energy group ENI after its partial privatization. It planned to reduce its stock in ENI to 35-40% but maintain control. The government`s 3-year economic plan did not include privatization of state electricity utility Enel.

Also, the government approved a plan to reform gasoline distribution and reduce the number of stations 25% to 21,000 by mid-2000.

Exploration, processing

Fina Italiana SpA and partner Mobil Oil Italiana SpA tested the Tempa d`Emma No. 1 appraisal well in south-central Italy. The well apparently extended Tempa Rossa field, discovered in 1989.

Drilled to 20,340 ft, the well cut a gross oil column of more than 5,320 ft and flowed on test 8,038 b/d of 16.5° gravity crude.

Concession partners were operator Fina Italiana SpA and Mobil 28.23% each, Enterprise Oil Italiana SpA 23.08%, and Lasmo Italia Sud SpA 20.46%.

An appraisal well drilled by ENI confirmed that Monte Alpi field, on southern Italy`s Grumento Nova concession, extends west into the Volturino concession.

MONte Alpi was previously proven to lie mainly in Grumento Nova in the southern Apennines. On test, appraisal well Alli 1 flowed at a maximum rate of 7,717 b/d of 35° gravity oil through a 1/2-in. choke, restricted by flaring constraints. Flow was from a 1,450-m horizontal section of the well, at a depth of 2,600 m. ENI was operator and had 45% while Enterprise Oil Italiana SpA had 55%.

Enterprise owned 55% of the field and Eni SpA 45%.

Condea Augusta SpA, Milan, planned to expand linear alkylbenzene production at its Augusta, Sicily, site by 100,000 metric tons/year after installation of solid bed alkylation process units by July 2000.

Shell Italia SpA sold its 50% interest in Camattini SpA, Parma, to Altana AG of Germany as part of its shake-up of its worldwide petrochemicals portfolio.

Camattini was a formulator of thermosetting resins for use in electrical components, tooling, and prototyping.

MONtell Polyolefins BV planned to boost production capacity at its Ferrara plant, which made catalysts for its polyethylene and polypropylene processes.

MONtell said capacity of its Ziegler-Natta catalyst plant would be expanded to more than 600 metric tons/year in early 1999 with start-up of a 270 ton/year production line.

Saras SpA was building a $65 million hydrocracker at its 285,000 b/d refinery at Sarroch, Sardinia. Completion was due by March 2000.

Pipelines, LNG

ENI agreed with the Romanian government to study the feasibility of an oil pipeline connecting the Romanian Black Sea port of Constanza to Italy`s Adriatic coast.

The South East European Line would incorporate exiting pipelines in Romania and Yugoslavia and require new construction. The 670,000 b/d project would cost $1.2 billion.

ENI agreed to buy as much as 50% more Libyan gas. It would reach Italy through an 8 billion cu m/year pipeline scheduled for completion in 2001.

Italy and Nigeria resolved a year-old dispute over deliveries of Nigerian LNG.

Italian electric utility ENEL agreed in 1998 not to cancel a sales contract with Nigeria after GdF agreed to regasify the LNG and ship an equivalent amount of gas to Italy.

ENEL`s plans for a regasification unit on Italy`s coast had been thwarted by public opposition. The parties agreed to delivery of 3.5 billion cu m/year beginning in fall 1999.

Snam took a 45% interest in a $1 billion Egyptian LNG project. Partners in the Egypt LNG project were Amoco with 45%, Snam 45%, and Egyptian General Petroleum Corp. (EGPC) 10%.

Mobil Oil Corp. and Italy`s Edison group completed a feasibility study for a 4 billion cu m/year LNG terminal in the northern Adriatic Sea. The $400 million terminal near Rovigo would be Italy`s first independent LNG project. Completion would be in late 2002.