Libyan gas supplies to Italy halted amid turmoil

ROME: Libyan natural gas supplies to its former colonial overlord Italy were halted on Tuesday amid turmoil in the North African state as Rome braced for an expected wave of migrants from Libyan shores.

Italy's ENI, the biggest foreign energy major in Libya, said supplies through the Greenstream gas pipeline between the two countries had been halted after it suspended some of its operations in the energy-rich country.

Libya accounts for 13 percent of Italy's gas supplies and almost a quarter of its oil but officials said they were not concerned because of reserves and the possibility of increased shipments from other countries.

Foreign Minister Franco Frattini said oil shipments had also been reduced.

The news came as Libyan leader Moamer Kadhafi in a live speech on national television ordered security forces to crush a popular uprising against him and said he would fight the insurrection to the "last drop" of his blood.

ENI said it was evacuating all "non-essential" international staff from the country, while the government said it was preparing to evacuate Italian nationals on a civilian jet and a military C-130 transport plane.

The anti-Kadhafi uprising has sent shockwaves through the Italian business world, with the stock market in Milan plunging by 3.59 percent on Monday and by 1.06 percent on Tuesday -- mainly due to companies linked to Libya.

Italy has huge investments in Libya, an Italian colony between 1911 and 1942, and Libya has also poured billions of euros (dollars) into Italian companies including top bank UniCredit and industrial giant Finmeccanica.

Libya is the largest shareholder in UniCredit with a 7.5-percent stake and its central bank governor Farhat Bengdara is also the bank's vice-president.

The company's share price fell 1.82 percent to 1.835 euros on Tuesday.

Italy is Libya's biggest trade partner and the fifth largest foreign investor in the country, excluding all its oil and gas activities.

Prime Minister Silvio Berlusconi was due to hold talks on the Libyan crisis with key ministers later on Tuesday after Italy put its air force bases on high alert and deployed extra military helicopters to southern Italy.

The meeting "will clearly examine the economic aspects of the crisis but also security aspects linked to migration flows," a government source told AFP.

"This is not just an Italian problem, it's European," the source said.

Defence Minister Ignazio La Russa earlier said the meeting would discuss the possible use of Italian armed forces to manage the expected influx of migrants.

La Russa said Italy would also be deploying a navy destroyer.

Libya shut down illegal immigration flows across the Mediterranean to Italy after signing a friendship treaty with Rome in 2008 that facilitated massive investments between the two countries.

The government source told AFP that Tuesday's government meeting would also "warn of the risk that the situation could degenerate, with grave consequences for political stability and territorial integrity."

Italian newspaper commentators and opposition politicians have criticised Berlusconi for his apparent reluctance to condemn Kadhafi and his failure to step in to try to stop the bloody repression in the country.