Italian gas pipeline from Sillaro field completed

By OGJ editors
HOUSTON, Dec. 19-- Italian national gas pipeline grid operator, Snam Rete Gas has completed the first pipeline to take gas produced by Australia's Po Valley Energy Ltd. to markets in northern Italy.

The connector pipeline extends from the Australian company's Sillaro field near Bologna, Italy, to the National Italian gas distribution grid.

"The connection follows closely on last month's grant by the Italian government of a 20 year production concession for Sillaro," said Michael Masterman, Po Valley chief executive officer.

Snam financed the pipeline grid connection, which was constructed in 8 weeks. Gas entering the Snam pipeline grid will be transported to the Italian gas market, which consumes 2.9 tcf/year-three times the Australian market. Prices at around $14 (Aus.)/Mcf are a multiple of Australian gas prices, and transportation costs are low.

In September, Po Valley completed construction of surface plant equipment for Sillaro at a total equipment cost of € 2.7 million. Following the grant of the Sillaro production concession, Masterman says the company expects to install the Sillaro surface plant in third-quarter 2009, enabling connection of the plant to the newly installed pipeline grid connection.

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