Energy ties between Italy and Russia were strengthened after two deals, valued together at about 2.35 billion euros, or $3.65 billion, were signed by some of the countries' leading companies in the sector.
In the biggest deal, OAO Lukoil Holdings, Russia's largest nongovernment-owned oil producer, said it is investing 1.35 billion euros in a new joint venture with Italian refiner ERG SpA.
Separately, Italian oil-services company Saipem SpA, which is controlled by Eni SpA, said it signed a contract valued at more than 1 billion euros to lay the twin Nord Stream underwater natural-gas pipeline connecting Russia and Germany via the Baltic Sea. Russia's OAO Gazprom is a leading figure in this project.
The deals are the latest in a series that highlight Russia's push into Western Europe.
Politicians in Brussels and Washington have been concerned lately that Europe is becoming too dependent on energy from Russia -- a reliance that could leave the continent exposed if diplomatic tensions should flare up with Moscow.
Russia is expected to supply more than a third of Europe's gas by 2015, up from more than a quarter currently. One of the clearest examples of Europe's growing dependence on Russian energy emerged two years ago, when western Europe's supply was disrupted after Russian gas monopoly Gazprom briefly shut off gas exports to Ukraine during a pricing dispute.
Gazprom and Eni are also working on a feasibility study for a South Stream gas pipeline that will ship Russian gas to Europe via the Black Sea. The line will pump as much as 30 billion cubic meters of gas a year and is estimated to cost 10 billion euros.
Lukoil has pledged to invest $25 billion in its downstream business by 2017 and has been looking to bolster its presence in Europe in particular.
In the joint venture between ERG and Lukoil, the Italian company will take a 51% stake; the Russian company, 49%. ERG will have an option to sell its stake to Lukoil over five years after the first year following the deal's close.
The Lukoil-ERG venture "is the biggest Russian investment in Italy and allows us to strengthen our position as [an energy partner] with significant international growth prospects," said Adolfo Urso, Italy's undersecretary at the Industry Ministry.
The company owns refineries in Bulgaria and Romania and runs gas stations in the U.S., Hungary, Finland, Poland, Serbia, Romania, Macedonia, Cyprus and Turkey.
The Russian company plans to fully integrate its share of ERG's Isab refinery in Sicily into its supply chain, noting that the plant can process Russia's benchmark Urals-blend crude. Isab can refine about 320,000 barrels of oil a day and is well positioned to meet growing European demand for kerosene and diesel, Lukoil said.
ERG Chief Executive Alessandro Garrone said the venture is in line with the Italian company's growth strategy.
Andrew Langley and Sabrina Cohen contributed to this article.
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