From: Financial Times - Germany: LNG Turns Into A Nightmare On The Adriatic

What began as a showcase green investment urgently needed by gas-hungry Italy has turned into a horror trip for the British energy giant BG Group. In addition to a corruption investigation, BG has faced environmental and political protests.

ZUM THEMA

The relationships with Community and LNG Speculators seem to be the same all over the world.

Behind locked gates bearing a "sequestered" court notice, a stretch of rubble jutting into the Adriatic is all that BG Group has to show for what should have been the biggest investment by a British company in Italy.
Only seagulls and anglers enjoy this empty expanse of reclaimed land in the port of Brindisi, an industrial wilderness in the heel of Italy. Because of a corruption probe involving former BG and local officials, the judiciary halted construction of the liquefied natural gas LNG terminal nearly a year ago.
BG Group is fighting hard to rescue the controversial project in the face of tough local opposition.
In addition to the corruption investigation, BG has faced environmental protests and political hurdles that have turned what began as a showcase green investment urgently needed by gas-hungry Italy into a nightmare for the British energy giant.
Even after everything has been signed, deals can unravel
Italy's disparate federal structure and intervention by the European Union also played important roles in a textbook case of how everything can unravel - even after all signatures are in place and building has begun.
Giovanni Antonino, in matching orange pullover and spectacles befitting his new image of management consultant, recalls how all the officials - including himself as then mayor of Brindisi, those in the province and the region of Puglia, plus the relevant ministries in Rome - unanimously signed off on the project.

Unlike coal or gas power plants, the natural gas plant would have environmental benifits in the long runThat was in 2003. Shortly afterwards, Mr Antonino spent a year in prison for crimes of corruption not related to BG. He was arrested again in February 2007 in a broader investigation into whether BG bribed officials to facilitate the authorisation process. Shuddering at the memory of his time in jail, Mr Antonino told the FT that to get out quickly he falsely confessed to receiving money from BG paid to a consultancy run by his ex-wife and the mother-in-law of a port authority official.
"BG did not bribe anyone for this contract," Mr Antonino insists. "My only illegitimate act was the illegal financing [by BG] of my electoral campaign of EUR 20,000 in 2002," he adds. Otherwise, BG had only given him three ties. BG denies denies all allegations of wrongdoing. It says it paid the consultancy for work done.
Invoices seized in dawn raids on BG premises, cited by officials, total EUR 360,000. A first court hearing is due on March 13 to determine whether a trial should proceed. Three former senior BG managers in Italy are among 15 people under investigation.
Domenico Mennitti, who was elected mayor in 2004 and opposes the project, rejects accusations of "nimbyism" (not in my back yard) directed at his city by the national media and Rome. "You could never call this place a garden," he retorts, reeling off the industries on his doorstep - including Europe's biggest coal-fired power station, which alone accounts for 10 per cent of Italy's carbon dioxide emissions, and a vast petrochemical plant whose previous US owners are accused of leaving behind a polluted mess.
Brindisi, he says, supplies 17 per cent of Italy's national grid and cannot be accused of not doing its bit. And still unemployment runs high.
Among his main objections to the LNG terminal are that it obstructs the port and it is dangerously close to both the petrochemical complex and the city of 90,000 people. His vision for Brindisi, with its picturesque harbour at the end of imperial Rome's Appia way, is more tourists and merchandise coming by boat and less industry. The terminal might benefit Italy, he says, but it was not in the interest of Brindisi.
Two friendly prime ministers of the day were keen promoters of the investment - Silvio Berlusconi and Tony Blair. The then UK ambassador to Rome, Sir Ivor Roberts, was dispatched to Brindisi in late 2005 when opposition was mounting. Officials describe how he brushed aside complaints, dismissing suggestions of an alternative location.
BG should have submitted Environmental Impact Assesment
So it was surprising that Mr Mennitti, who is close to Mr Berlusconi, fought the project, successfully arguing that BG should have submitted an Environment Impact Assessment (EIA), a view endorsed by the European Union last year. The EU also said there had been inadequate public consultation.
"Who comes to invest in Italy must respect the norms and laws of a country," says the mayor.
Following the EU intervention, Italy's current centre-left government - which mostly supports the project, except for the Green environment minister -suspended BG's authorisation pending an EIA. BG presented an eight-volume report last week. It could take up to a year for Rome to process.
In interviews, local officials convey a strong sense that, over the years of the postwar "economic miracle", Italy's central government and investors had ridden roughshod over sb. Brindisi and the south. Increasing assertiveness has come with the decentralisation of the past decade.
"A number of national and international companies saw this area as the soft underbelly of Italy to make profits," says Michele Errico, president of the province, prodding his own ample girth to make the point. "You didn't need much to buy everyone."
But the cultural climate had changed and the people had "revolted", whether their leaders were rightwing like the mayor, or from the left, like himself. "This project is madness, pure madness," he adds.
Terminals around the world are situated much closer to populated ares
Giorgio Battistini, current BG manager, is not giving up. Admitting that BG could have done better at informing the public, the group is preparing to engage. Maps, models and brochures are ready. Countering objections, they say the port will be blocked for at most one hour twice a week as tankers berth to unload their liquid gas into the regasifier.
BG points out that some terminals around the world are sited even closer to population centres and have never had a massive accident. They do not pollute; they can save fuel by providing cold energy to other industries, such as food storage; and they directly employ some 60 people.
No alternative site exists, says Mr Battistini, insisting that opposition is driven from the top by self-interested local politicians, not by the citizens of Brindisi.
Positions on both sides remain entrenched. In the end, BG Group might be saved from corruption accusations by the statute of limitations and from politicians by the next round of local elections, both in 2009.
In the meantime, Italy has come very close to running out of gas.