Reuters: Italy struggles with Plan B if Russian gas supplies cut

Italy will struggle to stay warm this winter if Russia's conflict with Ukraine disrupts gas supplies and Libya veers towards collapse, putting at risk an already shaky economic recovery following years of recession and sluggish growth.

Caught between dwindling gas imports from North Africa and a rising dependency on Russia, Italy's contingency plans for a complete breakdown in Ukrainian transit flows consist of raiding stockpiles, arranging costly emergency shipments, as well as forcing heavy industry to cut its output.

"It's a problem. In the short term, Italy has no alternative to Russian gas," said Leonardo Maugeri, ex-strategy head at Italian major Eni and now at Harvard Kennedy School.

Italy's winter gas prices are trading 2.6 euros ($3.43) per megawatt hour above rival benchmarks in northwest Europe, underscoring the view that its energy supplies are most vulnerable to Russian gas cuts and cold snaps.
MORE