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ERG and Shell Italy LNG project faces permit delay

ROME, May 19 (Reuters) - Local authorities said on Tuesday they needed more time to consider permission for Italian refiner ERG’s joint project with Royal Dutch Shell (News/Aktienkurs) to build a liquefied natural gas (LNG) import terminal in Italy.

The 50-50 project to build an 8 billion cubic metres (bcm) LNG terminal in Priolo on the island of Sicily has been plagued by authorisation delays with an onstream date sliding to 2013 from an original target of 2010.

Priolo mayor and other local authorities, who have a final say on the project, had requested more time to evaluate the project, the office of Sicily’s regional president said.

The local officials asked to postpone the meeting of a committee of local and central government officials which were expected to give the final authorisation to the project, from May 19 indefinitely, the statement said.

The project obtained environmental approval from Italian government last year.

Italy, which depends on gas imports to cover more than 80 percent of its energy needs, has only one operating LNG import terminal and the second one is expected to start full commercial operations in mid-2009.

(Reporting by Alberto Sisto and Svetlana Kovalyova; editing by James Jukwey) Keywords: LNG ERG/

(svetlana.kovalyova@thomsonreuters.com; +39 02 661 29450; Reuters Messaging: svetlana.kovalyova.thomsonreuters.com@reuters.net)