Italy’s Eni confident it will replace Russian gas completely by 2025

MILAN, July 29 (Reuters) – Italian energy group Eni believes it will be able to completely replace Russian gas imports by 2025 as uncertainty over Moscow’s energy supplies to Europe forces countries to seek alternative supplies.

After signing new gas supply agreements with Algeria, Egypt and Congo earlier this year, Eni sees additional opportunities arising in other countries in its global gas portfolio including Libya, Angola, Mozambique, Indonesia and also its home country.

The initiatives are designed to secure up to an equivalent of 100% of Russia’s 20 billion cubic meters of annual gas imports to the Italian market by 2025, the group said on Friday.

Italy’s biggest utility confirmed its 2022 goals despite a total hit of 2.6 billion euros it expects this year due to government measures in Italy, Spain and Romania.

Some countries, including Italy, have introduced or are studying measures to tax energy companies to help fund schemes to shield firms and families from surging energy costs as the war in Ukraine continues.

“We have already considered a total negative impact of 2.6 billion euros from government measures… this is included in our net debt goal for this year,” Enel CFO Alberto De Paoli said in a conference call.

The group reported a broadly flat core profit in the first half of this year as higher costs to produce electricity in Italy and Spain were partly offset by a good performance in Latin America and growth of the renewable business.

Ordinary core earnings in the first half came in at 8.3 billion euros, down 1.6% compared with the same period last year and in line with an analyst consensus.

The group is confident to offset the negative impact linked to higher electricity costs and has completed the renegotiation of contracts expiring this year, Enel CEO Francesco Starace said.

It is also pressing ahead with its plans to extract value from its assets, including Gridspertise unit and Enel X Way.

On Thursday, Enel announced an agreement to sell its 99% stake in listed Chilean power transmission company Enel Transmisión Chile for $1.345 billion. Rothschild bank acted as Enel’s adviser on the transaction that envisages also a price adjustment mechanism.

Enel expects its ordinary earnings before interest, taxes, depreciation and amortisation (EBITDA) to come in at between 19 and 19.6 billion euros this year from 19.2 billion euros in 2021.

It estimates net debt will fall to 61 billion euros from 62.2 billion euros at the end of June and has confirmed its dividend policy.

(Reporting by Francesca Landini, editing by Maria Pia Quaglia and Aurora Ellis)