LNG

SNAM, the Italian gas grid operator and liquefied natural gas import terminals owner, is progressing with the replacement and financing of natural gas pipelines to strengthen South-North infrastructure.

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.

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.

The oldest Italian LNG import terminal, the onshore Panigaglia facility near the port of Genoa, is set to receive more cargoes for the 2022-2023 winter season as the nation fully mobilises its regasification assets to help the European Union emerge from the supply crisis.

Panigaglia was Italy’s first ever LNG terminal and has been operational since 1969.

The Italian gas grid operator SNAM, whose name comes from Societa Nazionale Metanodotti (National Pipeline Company), runs the Panigaglia terminal as well as having a 49 percent stake in the LNG facility, the “FSRU Toscana”, moored off the Italian coast off the port of Livorno.

Italy currently has three full-scale LNG import terminals, the third being the Adriatic terminal co-owned by units of ExxonMobil Corp, and QatarEnergy.

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

The first additional cargo for Panigaglia was delivered on October 9 from Angola in southwest Africa after having been reloaded onto smaller ships at Spanish terminals for them to be compatible with the onshore terminal in Italy’s Liguria region, the crescent shaped coastal area also known as the Italian Riviera.

Cargo deals

“Further LNG deliveries from Egypt and Algeria are also expected in October at onshore Panigaglia,” said a statement from the supplier, Italian oil and gas company Eni.

“The overall contribution of additional LNG volumes to Italy, thanks to the availability of regasification terminals currently under development (FSRUs), will exceed 2 billion cubic metres between 2022 and 2023,” explained Eni.

“It will progressively reach 7 Bcm between 2023 and 2024, and will exceed 9 Bcm between 2024-2025, in addition to further supplies to be delivered via pipeline,” stated Eni.

SNAM has additionally agreed to buy a second floating storage and regasification unit (FSRU) from BW LNG of Singapore after purchasing the first FSRU from Norwegian fleet owner Golar LNG.

SNAM has signed an agreement to buy the “BW Singapore” which like the Golar vessel can act as a conventional carrier or an FSRU.

The “BW Singapore” was built in 2015 and has storage capacity of about 170,000 cubic metres and a nominal continuous regasification capacity of about 5 Bcm per annum.

The FSRU, which is currently bound by a charter agreement with a third party until November 2023, is expected to be based in the upper Adriatic Sea, close to Ravenna.

SNAM said the “BW Singapore” acquisition was financed from its own resources for an amount of around $400M.

SNAM agreed a similar deal at the start of June 2022 with Golar LNG, acquiring the FSRU “Golar Tundra” for $350M.

The 170,000 cubic metres capacity “Golar Tundra” may be deployed near a port on the Italian island of Sardinia.

The two FSRUs acquired by SNAM will contribute 13 percent of the national gas demand alone. 

Gazprom said the booking for the transit of Russian natural gas via Ukraine remained at the same level of previous days on the third day of the Nord Stream 1 pipeline maintenance shutdown as more LNG cargoes head for the European Union to partially offset the lower gas volumes.

Avenir LNG, the Norwegian-listed small-scale LNG project developer and vessel owner, has agreed to buy out the shareholdings of its Italian partners in the small-scale LNG terminal at Port of Oristano on the Mediterranean island of Sardinia.

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.

March 14 (LNGJ) – Europe's Mediterranean nations continue to be a main destination for US LNG cargoes. The 176,300 cubic metres capacity LNG carrier “La Mancha Knutsen” was delivering a US shipment on March 14 to the Italian floating storage and regasification unit deployed offshore Livorno, according to shipping data.  The cargo was lifted on February 28 from the Cheniere Energy Sabine Pass plant in Louisiana.

Italian natural gas network operator Snam, one of Europe’s leading energy infrastructure companies, said the volumes of gas injected into Italy’s network in the first half totalled 35.71 billion cubic metres, down 10.3 percent from the same period in 2019 because of the Covid-19 lockdown.