(Bloomberg) -- Eni SpA is working with Gazprom PJSC and Austria to restore Russian natural gas flows to Italy after supplies were halted on Saturday in an apparent scuffle over regulation. Options include a cash guarantee from the Italian utility.
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The Italian energy giant intends to evaluate options with Gazprom and the Austrian operator to unlock gas supplies to Italy, an Eni spokesman said in a statement on Monday. But it's premature to provide details before the practicality of the options is shared among the parties involved, he said.
Eni is ready to provide cash guarantees of around 20 million euros ($19.54 million) to restart Russian gas flows to Italy by this week and is assessing the feasibility of this solution, chief executive officer Claudio Descalzi is reported as saying by Italian news agency Radiocor.
The halt has been caused by Gazprom not paying a guarantee to the Austrian operator for the gas passing through Austria to Italy, Radiocor reported Descalzi saying.
While Italy has been weaning itself off Russian gas, Saturday's development highlights the vulnerability of European nations to President Vladimir Putin's moves to choke off energy to the continent. The standoff intensified last week after suspected sabotage on the Nord Stream gas links under the Baltic Sea.
"This is a contract issue between Gazprom and Eni that should be cleared up in the next couple days," said Carola Millgram, head of gas regulation at Austria's E-Control. The issue relates to new contract that Gazprom has yet to adopt, the country's regulator said.
Disputes over contractual clauses and regulation have accompanied the meltdown in economic ties between Russia and countries to its west, as Putin continues his war against Ukraine. Earlier this year, Russia's demand for gas deliveries to be paid in ruble contributed to soaring prices.
Italy once relied on Russia for about 40% of its gas imports, but has been aggressively cutting that dependence since the invasion in February. Italy has now sourced sufficient alternative supplies of gas from North Africa to make up for any shortfalls this winter if Russia were to cut off supplies, people familiar with the matter have told Bloomberg. Russian gas accounted for about 10% of Italy's imports before the halt.
The cutoff of Italian gas comes days after underwater blasts crippled the key Nord Stream gas pipelines connecting Russia with Europe.
(Updates Eni CEO comments in third and fourth paragraph)
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