follows: 
 THE MINERAL INDUSTRY OF ITALY 545 
 
Ente Minerario Siciliano, the Sicilian Government mining entity (60.7%);
Montedison, the Italian chemical company (38.3%); and ENI, the nationalized
petroleum company (6%). 
 Salt.—In 1978 a new salt refining plant came onstream at the Petralia
Mine in Sicilia. At the port town of Empedocle, a second facility for loading
salt was completed with a capacity of 100 tons per hour. 
 
MINERAL FUELS 
 
 During 1978 and 1979, Italy remained totally dependent on imported solid
liquid and gaseous hydrocarbons. Natural gas was the principal fuel produced
in the country. 
 CoaL.—Lignite was the only coal produced in Italy. Two mines,
Santa
Barbara and Pietrafitta, both in Perugia, were in operation. They were operated
by Ente Nazionale Elettrico (ENEL), and all output was consumed in ENEL's
power plants. Imports of bituminous coal, mostly for coking, were essential
for operating the country's economy. 
 Natural Gas.—Italy was dependent on imports to supplement limited
domestic production of natural gas. Italy had in force four long-term gas
supply contracts at the end of 1979. The Libyan Government assures delivery
of 10 million cubic meters per day of gas by tankers in the form of liquefled
natural gas (LNG). The contracts with the U.S.S.R. and the Netherlands provide
for deliveries of 20 million cubic meters per day through pipelines from
each country. Supplies from Algeria should become significant in the future.
During 1978, EN! and Sonatrach of Algeria signed a contract for construction
of a 2,500-kilometer-long pipeline from the Algerian gasfields of Hass' R'mel,
through Tunisia, under the Sicilian Channel, and across Sicily for connection
with the domestic natural gas pipeline system. The pipeline will supply 12
billion cubic meters per year for a period of 25 years starting in 1981,
at a total price of approximately $18.6 billion. The contract price is $1.28
per million BTU, very close to the current Algerian $1.30 base price for
LNG contracts with other customers. The 100-mile-long segment underwater
from Tunisia to Sicily, will be 16 inches in diameter, and the Italian firm,
Snamprogetti, was to be the builder. Total pipeline costs were estimated
at close to $3.4 billion. Construction started during 1979. 
 Imports will supply about 70% of Italy's domestic requirements by 1985,
shown as 
 
 
. 
 
(bi1lio~bici~eters) 
Total 
~ 
Natural gas: 
Algeria..         
U.S.S.R          
12.0 
7.5 
30.0 
17.5 
Netherlands       
6.3 
15.0 
LNG: Libya        
 
Total          
3.2 
7.5 
 
29.0 
70.0 
 Petroleum—Exploration for hydrocarbon continued offshore and onshore
and was moderately successful. Several discoveries were announced during
1978 and 1979, and these discoveries should slightly and temporarily improve
the modest domestic share of Italy's energy supply. Positive results in exploration
have given the proponents of domestic activities more arguments for continued
drilling in the country. 
 A new draft bill, aimed at encouraging exploration in Italy, was pending
in the Parliament at yearend. One major provision of the bill would encourage
formation of joint ventures for oil exploration. The draft bill would also
reduce royalties and taxes on offshore production, simplify administrative
procedures for processing of exploration permits, allow oil exploration companies
to reduce or enlarge concessionary areas depending on drilling results, and
provide longer term concessions in the event new and more time-consuming
technologies were employed to explore for oil. A major controversial item
which might hold up the draft legislation is a provision which would reallocate
at least part of all gas production (now reserved to ENI's distribution network)
to the major petroleum companies for use in their own marketing channels.~

 AGIP, a wholly owned subsidiary of stateowned EN!, announced an oil discovery
at Cavone, about 25 kilometers north of Modena. The third well in the area
was an oil producer from depths of 8,000 meters. Drilling in this area was
part of ENI's intensive deep exploration program in the Po Valley. Reportedly,
the oil has a density of 24° API and contains 2.5% sulfur. Reports
indicated
a peakout production of 1 million tons per year. 
 Total offshore concessions now cover 20,000 square miles of the 34,000 square
miles available in Italy, of which AGIP holds approximately 10,000 square
miles. To date, 82 deposits (results of 235 wells) have been discovered offshore
with petroleum