Eni has struck a major $8 billion deal with National Oil Corp. (NOC), securing future gas supplies.
Eni head Claudio Descalzi signed the agreement with NOC head Farhat Bengdara. Italian Prime Minister Giorgia Meloni and her Libyan counterpart Abdul Hamid Dbeibeh witnessed the signing today in Libya.
Meloni and Descalzi were in Algeria earlier this week, while other Italian dignitaries visited Egypt.
The deal today focuses on the development of the A&E gas fields, offshore Libya, in the D contract area.
Eni said it expects to start production in 2026. It will reach peak production of 750 million cubic feet per day of gas (7.7 billion cubic metres per year).
The development will consist of two main platforms tied in to existing treatment facilities at the Mellitah complex.
It will also include a carbon capture and storage (CCS) facility at Mellitah. Eni did not specify how much carbon the facility would capture. Previously it has been reported that it would be around 3 million tonnes per year.
Mellitah is the origin point for the 8 bcm per year Greenstream pipeline, which carries gas from Libya to Italy, via Sicily.
It will export gas in addition to channelling some volumes for local consumption.
“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,” Descalzi said.
According to tender information for a jack-up, which will drill the wells, the plan is to begin drilling in the fourth quarter of 2023.
Mellitah Oil & Gas, an Eni-NOC joint venture, has previously set out a plan to drill eight wells on the A structure and 23 on the E.
Libyan reports have described the deal as the most significant step for the country’s energy sector since 2011.
Eni produced 1.6 billion cubic feet per day of gas in Libya in 2022, with equity production of 165,000 boepd.
The Italian company started up the Bahr Essalam phase 2 project in the same area as A&E in 2018. This added around 400 mmcf per day of production, starting up three years after final investment decision (FID).