Italy's gas network Snam Rete Gas and the Galsi consortium confirmed on Tuesday their commitment to build a new pipeline to bring Algerian gas to Italy and set conditions for part of works.
The 900-km (560-mile) pipeline is vital for Italy, which depends on natural gas imports to feed its growing energy needs. The Galsi project would supply Italy with 8 billion cubic meters of gas a year with a start-up originally set for 2012.
The agreement signed on Tuesday "addresses the development, realisation and start-up of the Italian section of the project," Snam and Galsi-- whose partners include Algeria's Sonatrach with a 41.6 percent stake -- said in a joint statement.
In July, Sonatrach Chief Executive Mohamed Meziane was quoted by an Italian newspaper as saying the pipeline project faced delays after Snam found problems with its original route.
The statement on Tuesday did not mention a planned start-up date but reiterated the mutual commitment to the project.
Other Galsi partners are Italian utilities Edison with 20.8 percent, Enel with 15.6 percent and Hera with 10.4 percent and Sardinia Region with 11.6 percent.
The project includes the international undersea section, from Algeria to the south of Sardinia with a maximum depth of around 2,800 meters, and the Italian section across Sardinia and a new undersea link to Tuscany, where the pipeline will be connected to the Italian national transport network.
Under the agreement, Galsi will develop the engineering and obtain the main permits and authorisations required and Snam will build the pipeline and manage the gas transport activities, the statement said.
"This agreement represents another strategic stage in the process of opening up the gas market in Italy and in Europe, since it will allow the importation and sale of natural gas along a new route and allow new operators to embark on the Italian market," it said.
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