Snam to Invest 5.1 Billion In Italy, Eyes Investments in Europe
Snam is considering new investments in transport, distribution and storage, explaining it will pour 5.1 billion euro into Italy in the 2015-2018 period, while working together with Fluxys in order to maximise the value of its international assets.
On an international level, Snam said it will focus on two main European gas corridors: the East-West and the North-South.
‘Snam will also closely monitor the marketplace in order to capture possible opportunities to complete its exposure to the North-South and East-West corridors’ reads a report published by the Italian company on Monday.
The company holds a 84.47% interest in Austria’s TAG, and a 40.5% in France’s TIGF. Together with Fluxys, it also controls a 31.5% interest in Interconnector UK, owner and operator of the subsea gas pipeline between the UK and Belgium.
In the document released on Monday, Snam focused on TIGF, saying that the asset is of strategic importance in light of high hopes for the East-West energy corridor.
‘In the transport business, it is likely that additional investments will be incentivised, in order to unify the French market and achieve better interconnection with the Spanish market.’
Snam did not speak about its intentions to buy a 20% interest in TAP. In June, CEO Carlo Malacarne said that BP and Statoil might have an interest in leaving the consortium also comprising SOCAR (20%), Fluxys (19%), Enagas (16%) and Axpo (5%).
ITALIAN ASSETS
‘The 3.1 billion euro investments that Snam has planned in the transport sector in Italy represent approximately 61% of the overall investment plan of 5.1 billion euro for the 2015-2018 period. The investments are aimed at strengthening both import and export infrastructure, facilitating a bi-directional physical flow of gas in the coming years’
Snam said it intends to expand the entry capacity in Southern Italy, while continuing in its strategy to strengthen the network infrastructure in the Po Valley with approximately 450 kilometres of newly-operating pipeline and two new compression stations.
‘The “tailes” of certain development projects, in particular those aimed at expanding the entry capacity from the South, will go beyond the investment plan horizon (2019-2021), with estimated spending of approximately 1.7 billion euro.’
Snam also committed to replace 800 kilometres of existing gas pipeline for a planned investment of around 900 million euro, while investing 450 million in its Smart metering project.
Another 10% of its 5.1 billion planned investments will be directed to strengthen the storage infrastructure, increasing peak capacity.
‘New capacity development will moreover provide a solid foundation for the Italian storage system to play a key role in the creation of a “strategic” gas reserve at a European level, by sharing part of current national reserves of each country, with the objective of limiting as much as possible the risk of any decrease in imports.’
Sergio Matalucci is an Associate Partner at Natural Gas Europe. He holds a BSc and MSc in Economics and Econometrics from Bocconi University, and a MA in Journalism from Aarhus University and City University London. He worked as a journalist in Italy, Denmark, the United Kingdom, and Belgium. Follow him on Twitter: @SergioMatalucci