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Italy and Russia have signed deals worth more than €1bn. The agreements were sealed during the annual St. Petersburg International Economic Forum, with Italian Prime Minister Matteo Renzi meeting with Russian President Vladimir Putin.

The deals involve co-operation in various sectors, from space to energy, shipping and aeronautics. Russian gas producer Novatek signed two separate agreements with Italy’s Saipem and Nuovo Pignone (part of GE oil and gas) on co-operation on LNG projects ensuring maximum localisation of technical solutions in Russia.

Rosneft signed various agreements concerning: conditions of co-operations with Eni; a joint venture with Fincantieri on designing and engineering of a new vessel; another joint venture with Pietro Barbato regarding international sea freight; and a strategic partnership with Russian Helicopters and Leonardo-Finmeccanica for the supply of 30 AgustaWestland 189 helicopters.

Gazprombank group, Italian export credit agency Sace, its Russian counterparty Exiar and Socar, the state petroleum company of the Republic of Azerbaijan, also signed a memorandum of understanding on the financing of the construction of a petrochemical plant near Baku, in Azerbaijan, intended to supply Europe, Turkey and China. The project calls for the construction of a gas treatment plant, a polyethylene plant, a propylene unit and related infrastructures. Sace’s role would be to support contracts that may be assigned to Maire Tecnimont, which has acted as promoter of the initiative.

“We have signed agreements worth more than €1bn, and potentially, these agreements will open up opportunities for partnerships worth another €4bn or €5bn,” said Renzi in a press conference following the meeting between the two leaders. “Our position is that it is building bridges rather than walls that has strategic importance,” continued the Prime Minister, noting however that the deals respect the sanctions regime, as Italy follows the rules.

Relationships with Italy are of key commercial and strategic importance for Russia. “Besides being one of the key commercial partners for Russia, Italy is also seen by Moscow as one of the EU countries that could convince the European bloc to start lifting the sanctions on Russia,” Lilit Gevorgyan, Russia and CIS analyst at IHS, tells GTR. “Moscow is hoping that Italy, together with Hungary and Greece, could counterbalance some of the Eastern European members, that insist on harsher stance on Russia until it complies with international norms.”

Italy has already invited caution at EU level in handling the sanctions against Russia, insisting that they would be reviewed in light of progress on the Minsk Agreements, rather than automatically extended, and even proposing to reduce the review time from every six to three months.

According to Gevorgyan, Italy’s position as a key member of the EU implies it has to balance its economic interest without undermining the EU’s united front in matters of upholding international law. Italian exports have been hit by the Russia sanctions, while the country’s demand for Russian gas remains high. “Italy is one of the largest consumers of Russian natural gas. Despite lower price value last year, deliveries grew 12% in physical volumes,” Putin pointed out.

In replying to a reporter asking whether Putin should be the one making the first step in a rapprochement to Europe, eliminating Russian sanctions on EU products, the Russian President hinted that if sanctions were to be lifted, it would be on a mutual basis. “We need to be sure that any unilateral moves by Russia will be followed by reciprocal steps, real steps, not, as a well-known classic said, ‘one step forward, two steps back’,” he said.