Decision on $3bn Galsi pipeline delayed

15 June 2015

Officials remain optimistic

  • Decision now due to be made on 31 May 2016
  • Shareholder meeting was made on 28 May 2015
  • The project has already seen significant delays

The final investment decision on the $3bn Galsi pipeline has been postponed until 31 May 2016 as the project waits for final approvals from authorities in Tuscany and Italy’s Ministry of Economic Development.

Speaking to MEED, Stefano Bosco, Galsi’s chief financial officer, says the decision to postpone was made at a shareholder meeting on 28 May.

The pipepline is planned to link the Algerian gas network to Italy through a subsea pipline, allowing for increased imports from Africa to Europe.

The delay came in the wake of a statement from Algeria’s Prime Minister Abdelmalek Sellal, who said the country was ready to relaunch the Galsi project on 27 May.

Sellal said the pipeline relaunch would form part of a new vision of energy security for both Italy and Europe.

Reacting to the prime minister’s comments, Bosco says optimism about the project among senior Algerian officials should have a positive impact on the scheme’s development.

“What Sellal said… is good news for the project, but… Galsi has to wait for the practical consequences of the statements,” he says.

The Galsi pipeline has already seen significant delays. It was originally due for completion in 2009, but there were difficulties in obtaining authorisation for the route and landing points, as well as protracted intergovernmental negotiations.

Galsi was created in 2003 and is owned by several stakeholders:

  • Sonatrach (Algeria) – 41.6 per cent
  • Edison (Italy) – 20.8 per cent
  • Enel (Italy) – 15.6 per cent
  • Hera (Italy) – 10.4 per cent
  • The region of Sardinia – 11.6 per cent

The pipeline will have a capacity of 8 billion cubic metres a year and sections will be laid at a depth of 2,885 metres.

The 520-kilometre-long Italian section of the pipeline will account for about two-thirds of the cost, with the 310km section between Cagliari and El-Kala on the Algerian coast making up the balance.

Stay informed with the latest in the Middle East
Download the MEED app today, available on Apple and Android devices

A MEED Subscription...

Subscribe or upgrade your current package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.

Get Notifications