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European-Algerian Natural Gas Pipeline Deal is Delayed Again

In an effort to reduce reliance on natural gas reserves from Russia and the high prices charged by Gazprom, Europe has been looking to invest in alternative pipeline projects to diversify the supply. One option being considered would see natural gas from Algeria, in North Africa, piped via Sardinia to Northern Italy; however the fate of this project is now up in the air as the date for making a decision regarding its viability has been delayed once again.

The pipeline would provide an 8 billion cubic metre link between Algeria and Europe, and grant the African nation the ability to increase its production and start fracking for shale gas, without worry of looking for a new market. However a series of delays have haunted the progress of the project since its conception ten years ago.

Related Article: Why the US should not Invest in Exporting Natural Gas

First Italian officials deferred making a decision, and now Algeria’s partner in the deal, Sonatrach, has announced that it will not give its final approval in November as planned, but will wait until May 2013. They have insisted that this does not jeopardise the plans, but many in Rome are now wary that the whole venture is dead in the water.

Reuters have reported that Sonatrach is wary due to Italy’s potential involvement in other giant natural gas pipeline projects, and first wishes to see what deals are done in regards to the Trans-Adriatic and South Stream pipeline projects. Unfortunately this might cause even further problems as officials in Rome have just recently said that they will not make any decisions on the other pipelines until September of next year.

By. Charles Kennedy of Oilprice.com



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