Eni SPA E is negotiating with the Egyptian authorities to increase natural gas imports to Italy and Europe, per a Bloomberg report.

The move came as Italy sought ways to cut off Russian energy supplies in response to the country’s aggressive invasion of Ukraine.

Eni already has an agreement with Egypt-based energy company EGAS to raise natural gas production and liquefied natural gas (“LNG”) exports from Egypt to Europe and Italy.

The companies plan to increase LNG supplies to Europe by 3 billion cubic meters per year. The new agreement would enable Eni and Egypt to provide additional export capacity to Italy in the next two years.

The discussions are being made as the European Union members engaged in consultations with natural gas producers worldwide to diversify away from Russia hydrocarbons and import from other reliable suppliers. The bloc is expected to sign a memorandum of understanding with Egypt and Israel in Cairo, which would enable Israel gas liquefaction at Egypt’s processing facilities before getting shipped to Europe.

Italy obtained multiple supply deals with Africa’s oil and gas exporting countries after Russia’s attack on Ukraine. Eni has a long-standing presence in the region through Egypt and Libya. Eni is working on all possible ways to obtain an additional quantity of gas or LNG, which could contribute to Italy and Europe’s energy security.

Eni has been contributing to Egypt’s growth since 1954. The company is currently a leading producer in Egypt, with an equity hydrocarbon production of 360,000 barrels of oil equivalent per day. The company engages in initiatives aimed at decarbonizing Egypt’s energy sector. This includes the development of CCS plants, renewable energy plants and agro feedstock for biorefining.

Price Performance

Eni’s shares have gained 4.8% in the past six months compared with the 41% rise of the industry.

 

Image Source: Zacks Investment Research

 

Zacks Rank & Stock to Consider

Eni currently has a Zack Rank #3 (Hold).

Investors interested in the energy sector might look at the following companies that presently flaunt a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Continental Resources, Inc. CLR is an explorer and producer of oil and natural gas. The company expects to generate positive free cash flows for the seven consecutive years in 2022.

Continental has a strong focus on returning capital to shareholders. The company’s board of directors announced a quarterly dividend payment of 28 cents per share, which increased 21.7% from 23 cents per share in the previous quarter. The company also increased its existing share repurchase program to $1.5 billion.