LNG

SNAM, the Italian gas grid operator and liquefied natural gas import terminals owner, outlined a 2024 financial outlook in its annual report just published with the next goal being the deployment of a floating storage and regasification unit (FSRU) at the Italian Adriatic port of Ravenna.

Italian floating LNG terminal company, OLT Offshore LNG Toscana controlled by Italian natural gas grid and LNG terminals operator Societa Nazionale Metanodotti (SNAM), said the “FSRU Toscana” vessel would be undergoing long-term maintenance at a shipyard and would be offline for six months.

SNAM Chief Executive Stefano Venier said the natural gas grid and terminals owner would begin commercial operations by the end of May at Italy’s newest and fourth LNG import terminal at the Port of Piombino in Tuscany.

The Italian Port of Piombino in northwest Italy, located opposite the island of Elba, is facing further delays to host one of two floating storage and regasification units purchased by Italy’s grid and LNG terminals operator SNAM.

An Italian administrative court has postponed to July 5 a decision over a case being pursued by local opponents of the Piombino FSRU.

SNAM has plans to deploy the 154,950 cubic metres capacity FSRU “Golar Tundra” at Piombina.

However, some members of Piombino's municipal administration filed a legal challenge in late 2022 against the government-backed project, part of Italy’s plan to support the European Union’s replacement of Russian pipeline gas with LNG deliveries from nations such as the US, Qatar, Algeria and Egypt.

The government-appointed commissioner for the FSRU project, Eugenio Giani, had previously issued a statement saying he hoped to have authorization from the local municipality by the end of October, 2022, though instead they raised a challenge.

Ideal FSRU site

Commissioner Giani has said that Piombina was an ideal site for an FSRU with its under-used jetty and nearby pipeline gas infrastructure connections.

He has noted that there was no other place in that region of Italy where there was a “substantially unused jetty of 300 metres in length” and pipeline links.

The Piombina FSRU and the second SNAM FSRU would be Italy’s fourth and fifth LNG import terminals after the onshore facility at Panigaglia near Genoa, another FSRU offshore the port of Livorno and the Adriatic LNG facility, an offshore gravity-based structure on the east coast.

The second SNAM FSRU is the 170,000 cubic metres capacity “BW Singapore”. The vessel was purchased by SNAM and is currently bound by a charter agreement with a third party until November 2023.

According to SNAM the “BW Singapore” could be deployed eventually in the upper Adriatic Sea, close to the Port of Ravenna where there is already a small-scale onshore LNG fuel terminal and other petroleum storage infrastructure.

SNAM, the Italian natural gas grid and LNG terminals operator, said the most recent projections for the evolution of gas demand in Italy this year point to a decline by year-end compared with 2021 because of higher prices, milder weather and more LNG cargoes brought in to help boost storage.

Natural gas demand in Italy fell by 3.2 percent in the first nine months of 2022 to 51.66 billion cubic metres from 53.40 Bcm in the same period of 2021.

SNAM said natural gas moving through the storage system in Italy in the first nine months rose by 8.3 percent to 15.71 Bcm versus last year’s 14.51 Bcm.

“In the first nine months of 2022, the LNG terminal of Panigaglia (La Spezia, near Genoa) regasified 1.47 Bcm of LNG and increase volumes by 34.9 percent as 38 LNG carriers were unloaded compared with 25 carriers unloaded in the same period of 2021,” said SNAM.  

“The warmer weather, the effects of the increase in energy prices in the industrial sector as well as the measures envisaged in the ‘National Natural Gas Consumption Containment’ plan have cut demand and improved supplies,” said SNAM.

“Despite the reduction in imported Russian gas flows to Italy experienced in particular in the third quarter of 2022, the overall performance is not expected to be impacted significantly this year,” added the company.

“The current European gas market is affected by uncertainty on the supply side. This has engendered substantial volatility at the European hubs in past months with sharp price differentials in markets with greater regasification capacity,” explained SNAM.

Price forecasts

“Although prices are currently subsiding after the records posted in August because of the high level of gas in storage facilities and the European demand containment plan, forward prices for the coming winter months remain strong and above €100 per megawatt hour pending the arrival of colder weather,” it stated.

The numbers came in SNAM’s nine-month earnings report in which revenues rose by 10.3 percent to €2.40 billion ($2.41Bln) compared with €2.17Bln the same period of 2021.

The company's nine-month net profits declined by 0.6 percent to €932 million from €938M in the prior-year period.

SNAM, whose name comes from Societa Nazionale Metanodotti (National Pipeline Company), operates the onshore Panigaglia LNG facility as well as having a controlling stake in the LNG facility, the “FSRU Toscana”, the floating storage and regasification unit (FSRU) moored off the Italian coast between the cities of Livorno and Pisa.

SNAM has also agreed to purchase two stakes held by Italian oil and gas company Eni in natural gas pipelines from Algeria, though the deals have not yet gone through.

“With regard to the agreement announced on November 27th, 2021 concerning the sale to SNAM of 49.9 percent of the investments held by Eni in the companies that manage the two groups of international gas pipelines connecting Algeria to Italy, the closing of the transaction has been postponed to the end of the year, pending the completion of the authorisation process,” SNAM explained.

FSRU deployments

SNAM is additionally bringing two more FSRU into the Mediterranean to increase the quantities of LNG available to Italy, including the “BW Singapore” being purchased from BW Group of Singapore.

SNAM agreed a similar deal at the start of June 2022 with shipping group Golar LNG, acquiring the FSRU “Golar Tundra” for $350 million to help boost imports.

“With receipt of authorisation to begin operation of our regasification vessels, we take the first step in the remodelling of our national energy security, which will soon have to be accompanied by the expansion of transport and storage infrastructure and an acceleration of initiatives for the transition, in which SNAM expects to play a leading role,” declared SNAM Chief Executive Stefano Venier in the earnings report.

“Performance in the first nine months of 2022 confirms the soundness of the Group’s action even in an environment clouded by uncertainty,” he added.

“The strong performance of our entire Italian business despite the reduction in regulated rates in the gas segment, the contribution of our foreign associates and the new businesses connected with the energy transition have contributed to the stability of our profits,” stated the CEO.

Italy's gas grid and LNG terminal group SNAM has signed an accord with Italian utility company Edison, a subsidiary of French power operator Électricité de France, to develop small-scale LNG projects focused on the Mediterranean.

Adriatic LNG, the operator of the largest of three Italian regasification terminals, said it was ready to offer more capacity to Italy and Europe with an increase from 8 billion cubic metres per annum to 9 Bcm per annum.

The terminal is located 15 kilometres (9.3 miles) off the Veneto coastline and is a gravity-based structure.

The Italian Ministry of Ecological Transition, with Decree 4 of March 15, 2022, verified the facility’s compliance with the environmental pre-operating conditions of a new decree.

The terminal has been on line since autumn 2009 and is a private operator. It is co-controlled by ExxonMobil Italiana Gas and Qatar Terminal Ltd, a subsidiary of QatarEnergy, while Italian gas network operator SNAM has a 7.3 percent shareholding.

It has so far handled more than 800 cargoes at its offshore base. The terminal includes two LNG storage tanks, each with a capacity of 125,000 cubic metres.

“The Adriatic LNG terminal is a unique case in the panorama of Italian and European regasification terminals, as it has for years boasted the highest average utilization rate. It was 92 percent in 2021 against a monthly average at European level of between 29 percent and 40 percent,” said the company.

Private resources

“In addition, the infrastructure was built and is managed with private resources without, therefore, any financial burden on the gas system and without constituting a cost in the bill for citizens,” it added.

By increasing its regasification capacity, Adriatic LNG will be able to make a greater contribution to meeting the country's natural gas needs as it will be able to cover around 12 percent of annual Italian consumption.

“We have reached an important milestone at a critical time for our country's energy security,” said Alfredo Balena, Director of Public of Government Affairs at Adriatic LNG.

“Increasing the capacity of our terminal represents for Italy and also for Europe a tangible way to increase and diversify LNG imports,” added Balena.

Adriatic LNG is capable of receiving almost all classes of LNG carriers, with a capacity ranging from 65,000 cubic metres up to 217,000 cubic metres capacity.

The increase in regasification capacity at the Adriatic terminal will be achieved through the optimisation of the operating conditions of the infrastructure, without any structural changes to the current configuration.

The eight supplying countries so far to the Adriatic facility have been Qatar, Angola, Egypt, Trinidad and Tobago, Equatorial Guinea, Norway, Nigeria and the US.

Italian natural gas network and LNG terminal operator Snam, Europe's first company to test the injection of a blend of hydrogen and natural gas into its grid, has signed a cooperation accord with LNG producer Abu Dhabi on studying the potential of green gases.

Snam Rete Gas, the Italian natural gas network operator, has decided to recommission storage at the nation’s oldest LNG import terminal near Genoa while also completing a $10 billion deal for a minority stake in gas pipelines in the United Arab Emirates.

Jan 3 (LNGJ) – Seven cargoes will be unloaded at European terminals in the next week. The 145,000 cubic metres capacity “Methane Rita Andrea” is delivering a shipment on January 3 to the Aliaga facility near the port of Izmir in Turkey from the Trinidad plant in the Caribbean, according to shipping data. The 75,000 cubic metres capacity carrier “Cheik Bouamama” is unloading a cargo on January 4 at the Italian Panigaglia terminal near Genoa from the Skikda plant in Algeria. The 141,000 cubic metres capacity vessel “LNG Cross River” will deliver a cargo on January 4 to the Sines terminal in Portugal from the Nigerian plant on Bonny Island.
   The 147,200 cubic metres capacity vessel “Arctic Princess” is scheduled to deliver a shipment on January 5 to the Dunkirk import terminal on the Channel coast of France from the Equinor plant at Hammerfest in Norway. The 216,000 cubic metres capacity vessel “Al Hamla” is scheduled to deliver a Qatargas shipment on January 5 to the Swinoujscie terminal in Poland. The 150,200 cubic metres capacity vessel “Seri Camar” will deliver a cargo on January 9 to the Aliaga facility in Turkey from the US Cove Point plant in Maryland. The 145,000 cubic metres capacity vessel “Milaha Qatar” will unload a Qatargas shipment on January 11 at the Adriatic LNG import facility in Italy.