Eni inks agreement for $8 billion gas development project off Libya

Italian oil and gas company Eni and the National Oil Corporation of Libya (NOC) have signed an agreement for the development of a strategic project aimed at increasing gas production to supply the Libyan market as well as to ensure export to Europe.

Eni’s CEO Claudio Descalzi and Farhat Bengdara, the CEO of NOC, agreed on the development of the Structures A&E project which will comprise two gas fields located in the contractual area D offshore Libya.

The combined gas production from the two structures is expected to start in 2026 and reach a plateau of 750 million of standard gas cubic feet per day. Production will be ensured through two main platforms tied-in to existing treatment facilities at the Mellitah Complex.

The project also includes the construction of a carbon capture and storage (CCS) facility at Mellitah.

The overall estimated investment will amount to $8 billion. The project is said to be the first major project in Libya since early 2000.

“This agreement will enable important investments in Libya’s energy sector, contributing to local development and job creation while strengthening Eni’s role as a leading operator in the country,” said Descalzi.

Eni has been operating in Libya since 1959, with a share of 80 per cent of the national production (1.6 bscfd in 2022).

Operations are run through the joint company Mellitah Oil and Gas BV, in which Eni and NOC each hold 50 per cent. The average equity production was 165,000 barrels of oil equivalent per day in 2022.

In terms of Eni’s other activities in Africa, it is worth noting that the Italian energy giant last week signed strategic agreements with Algeria’s state-owned Sonatrach to pool resources with the aim of accelerating the reduction of greenhouse gas and methane emissions while strengthening energy security.

The two companies will work together to identify opportunities for emissions reduction and define energy efficiency initiatives, renewable energy developments, green hydrogen projects and CCS projects, to support energy security and a sustainable energy transition. In addition, the players will conduct studies to identify possible measures to improve Algeria’s energy export capacity to Europe.