Italian gas imports from Russia and northwest Europe hit new lows on Sunday, as flows from Algeria continued to defy expectations, remaining at a steady high since the start of April, according to data from Eclipse Energy, an analytics unit of Platts, Monday.
The rise in Algerian gas exports to Italy since the start of the second quarter has seen a slump in supplies from Italy's other core gas suppliers.
Italy is Europe's third biggest gas market with consumption of some 66 Bcm in 2015, and it is reliant on imports for as much as 90% of its demand.
Russia was Italy's largest single gas supplier last year, delivering 49% of all Italian imports, or 30 Bcm.
On Sunday, gas supplies from Russia to Italy fell to just 48 million cu m, the lowest level since the end of January, according to the Eclipse data.
And supplies via Switzerland from northwest Europe on Sunday hit their lowest point since October last year at just 6 million cu m.
By contrast, Algerian gas exports to Italy on Sunday totaled 63 million cu m, in line with the average since the start of the month, the Eclipse data showed.
That is significantly higher than the 16 million cu m/d average in March.
RUSSIAN FLOWS
Russian exports to Italy in the first quarter averaged 77 million cu m/d, so the drop to less than 50 million cu m/d at the weekend is significant.
A theoretical continued rate of 50 million cu m/d for the rest of the year would see Russia supply just 21 Bcm to Italy in 2016.
The slowdown in Russian supplies to Italy is surprising in some ways after Eni agreed with Russia's Gazprom in January this year to "maximize" the sale of Russian gas under the partners' long-term contract supply agreements.
However, Eni CEO Claudio Descalzi also said in March that Eni had re-negotiated in 2015 its long-term gas import contract with Algeria's Sonatrach to include increased gas volumes.
The sudden hike in Algeria exports could be attributed to a number of factors, including lower LNG production and customers nominating higher volumes because of favorable prices under long-term, oil-indexed contracts.
Algerian pipeline exports to Spain are also well up so far in April, supplies averaging 41 million cu m/d compared with a March average of just 29 million cu m/d, the Eclipse data showed.
