Snam SpA has agreed to buy a 20% stake in the Trans Adriatic Pipeline (TAP) from Norway's Statoil ASA (NYSE: STO).
The move will expand the Italian gas transporter's geographical footprint and strengthen its ambition to create a gas hub.
State-controlled Snam said on Dec. 1 it would pay Statoil Holding Netherlands 130 million euros (US$138 million) for the stake in the pipeline which will carry gas from Azerbaijan to Europe.
Snam said it would also take over a Statoil 78 million euro loan to TAP.
"Snam's entry in the project will reinforce its primary role and that of Italy's infrastructure in boosting competition among supply sources and strengthening security of supply for the European gas system," Snam CEO Carlo Malacarne said.
The TAP project aims to transport gas from Azerbaijan's Shah Deniz II Field in the Caspian Sea, one of the world's largest gas fields, by the end of the decade.
"This divestment increases our financial flexibility and is in line with our strategy of portfolio optimisation and capital prioritisation," said Jens Oekland, Statoil's executive vice president for marketing, midstream and processing.
Statoil sold its shares in Azerbaijan's Shah Deniz gas field as well as the South Caucasus Pipeline (SCP) last year, but retained a 20% stake in TAP.
The 870 km (541 miles) TAP pipeline will connect with the Trans Anatolian Pipeline (TANAP) near the Turkish-Greek border at Kipoi, cross Greece and Albania and the Adriatic Sea, before reaching southern Italy.
Snam, which has a strategic alliance with Belgium's Fluxys, had previously said it was interested in taking a stake in the TAP gas pipeline project.
In September Snam signed a memorandum of understanding with Azerbaijan's state energy firm SOCAR to develop a new major route for gas flows to Europe that does not pass through Russia.
SOCAR's president said on Nov. 10 that Snam was interested in buying a 17% stake in Greek gas grid operator DESFA.
Snam is spending more than 5 billion euros over the next four years to upgrade its grid and play a leading role in Europe's plans to make gas supplies more secure. (US$1 = 0.9451 euros)
Oil firms Equinor and Rosneft expect to extract some 250 million barrels of oil and 23 billion cubic meters of gas during the first part of the development of the Severo-Komsomolskoye oilfield in Russia, Equinor said on Dec. 23.
Repsol will still hold a 51% stake in the block after the deal.
The latest discovery was made by the Mako-1 well drilled about 10 km southeast of the Liza Field.