Italy's top oil and gas group to build new power plant to fight blackouts

MILAN - Italy's top oil and gas group Eni said on Tuesday it had started building a 1,170 megawatt power plant in southern Italy which would help reduce the country's reliance on imports and cut the risk of blackouts.

Italy, which depends heavily on ageing power stations and has to rely on imports to meet its electricity needs, has been stung by outages recently due to record summer electricity demand and supply problems with Electricite de France [EDF.UL].

Eni said in a statement the first unit of the combined cycle plant would be completed in the spring of 2005.

The oil and gas giant, which is flexing its muscles in a liberalising electricity market, said the new plant would be the biggest in its power division which has other three plants and would help the group to hit a 6,000 MW capacity target in 2006.

State-controlled Eni said investment in the project amounted to 550 million euros.

Italian electricity companies ordered country-wide power cuts on June 26 for the first time since 1981 as a heat wave brought the national power grid close to collapse.

Italy's dominant multi-utility Enel ((ENEI.MI)) earlier this month decided to add 1,600 MW of power capacity through a combination of re-activation of idled capacity and a new plant, to help prevent a recurrence of the blackouts, which affected some six million people.