Italy, following the lead of France and West Germany, appears close to an agreement that could more than double Italian reliance on Soviet natural gas.
SNAM, the gas subsidiary of Italy's hydrocarbons agency, disclosed last week that it had reached an understanding with Soyuzgasexport, its Soviet counterpart, on all aspects of future Soviet gas supplies to Italy.
The understanding was reached despite an official moratorium on negotiations with the Soviets after the military crackdown in Poland. Citing the moratorium, Premier Giovanni Spadolini's government quickly intervened, saying the agreement--which needs government ratification--was purely technical and that no final pact had been reached.
But political sources said recent decisions by West Germany and France to go ahead with their own Siberian gas deals are likely to influence the Italian government. They predict that the Italian-Soviet agreement, reportedly for 283 billion cubic feet of gas per year for 25 years, will probably win eventual approval.
Supporters of the gas agreement, including most of Italy's large manufacturers and trade unions, believe it is in line with the country's new energy plan, which calls for the diversification of the country's energy sources and suppliers. Designed to reduce sharply this energy-starved nation's oil dependence, the plan calls for a sharp drop in the use of oil and an increase in reliance on gas, which now accounts for 15 percent of energy consumption, and coal.
But some Western energy planners fear increasing dependence on gas supplies from the Soviet Union and Algeria could leave Western Europe politically vulnerable in a future energy crisis.
In recent years, Italy has imported slightly more than 200 billion cubic feet of natural gas each year from the Soviets--about 40 percent of Italy's gas imports and 8 percent of its total energy consumption. With the new Siberian pipeline, in 1990 that amount could more than double.
The chief domestic opposition to the agreement with the Soviets comes from the strongly anti-communist Social Democrats and from the Italian Socialists, who oppose it on economic and security grounds.
The opponents object in principle to dependence on the Soviet Union. They also strongly believe that the agreement is not economical. They say the low interest rates attached to the credit lines requested by the Soviet Union to finance the pipeline amount to a subsidy equal to the gas price.
The Socialists want Italy to concentrate instead on Algerian gas, although negotiations over that contract, for 424 billion cubic feet annually through the year 2006, have stalled over a price dispute.
Although a new 1,500-mile pipeline linking the oil wells of the Sahara and passing through Sicily to the Italian mainland is in its final stages, the 1977 contract has been blocked by Algerian demands for a price of at least $6.10 per million British thermal units--the equivalent cost for oil.