One of the options would be the second train of the Egyptian LNG (ELNG) project, in which BG is one of the leading participants. 'There is no link between the two projects, but Brindisi could be an offtaker from the second train of ELNG,' says a BG official.

The output of the first ELNG train will be purchased by Gaz de France. BG says ELNG plans to bring the second train on stream in 2006. Commercial negotiations are being held with prospective offtakers. Other options for the Brindisi terminal would include sourcing the gas from Algeria or Qatar.

The Brindisi project has been approved through the Conference of Services Article 8 comprehensive authorisation process held by Italy's Ministry of Productive Activities, which represents national, regional and local authorities. A formal decree is expected to be issued soon.

BG says the first phase will entail importing 3 million tonnes a year through the terminal by the end of 2006. Preliminary front-end engineering and design (FEED) studies have been carried out by Bechtel of the US.

Italy at present has one LNG import terminal, in the northwest. The Brindisi terminal would be well placed to serve gas consumers in the south of the country. It will be located only 5 kilometres away from the 29,600-kilometre national transmission network operated by Snam Rete Gas.