LNG

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 has approved two projects for floating LNG import terminals off the coast of Ravenna in the eastern Adriatic Sea and at the West Coast port of Piombino, opposite the island of Elba.

Italy has said that as part of its energy security strategy two floating storage and regasification units (FSRUs) will be added to the three existing LNG import facilities.

The two new LNG terminals, both to be operated by Italy's state-controlled gas grid operator SNAM, will have a capacity of 5 billion cubic metres, covering around 15 percent of national annual gas consumption.

The FSRUs will be Italy’s fourth and fifth LNG import terminals after the onshore facility at Panigaglia near Genoa, another FSRU owned by OLT Offshore Toscana off the port of Livorno and the Adriatic LNG facility, an offshore gravity-based structure on the east coast.

The FSRU destined for Ravenna, the 170,000 cubic metres capacity “BW Singapore”, was purchased by SNAM and is currently bound by a charter agreement with a third party after which it will be deployed by the end of 2024.

SNAM Chief Executive Stefano Venier said that preparatory works would last two years with the Ravenna terminal expected to start operations in the fourth quarter of 2024.

“We have chosen Ravenna and Piombino both for the technical characteristics they offer us, but also because they're close to consumers,” stated Venier.

Italy is planning on the Piombino FSRU being operational by the end of March 2023.

The Piombino terminal will be in the form of the deployment of the 154,950 cubic metres capacity FSRU vessel “Golar Tundra”.

Ideal location

The port of Piombina was chosen because there was no other place in that region of Italy where there was a substantially unused jetty of 300 metres in length.

In addition the FSRU will be only 8.8 kilometres (5.5 miles) from the main SNAM gas network connections.

SNAM also officially ended its gas injection campaign at the end of October with the level of gas stocks managed by subsidiary Stogit reaching 95.2 percent for a total of 11.2 Bcm of natural gas in addition to the 4.5 Bcm held as strategic reserves.

The network operator added that the national energy system would also have access to an additional 1.1 Bcm held in the storage facilities of other operators.

“The supply of gas from storage will take place in the coming months on the basis of the guidelines soon to be issued by the Ministry of the Environment and Energy Security using transparent auction mechanisms,” added SNAM.

Leading oil and gas and LNG executives as well as heads of European Union utilities had interesting observations to make on the first day of the four-day Gastech Conference and Exhibition held in the northern Italian city of Milan.

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

Former SNAM SpA Chief Executive Marco Alvera, who has left the Italian gas grid operator with control of two Italian LNG import terminals to pursue his own venture, has been granted a pay-off of more than €5 million ($5.23M) plus other benefits.

Italian energy company Eni has agreed to sell a minority stake in two pipelines involved in transporting natural gas from Algeria to Italy for €385 million ($435M) to Italian LNG terminal and gas grid operator Snam.

Italian natural gas network operator Snam, one of Europe’s leading energy infrastructure companies and operator of two LNG import terminals, reported an almost 4 percent rise in nine-month revenues to €2.03 billion ($2.40Bln) even as natural gas demand dropped because of Covid-19 lockdowns.

Oct 22 (LNGJ) - Societa Nazionale Metanodotti (Snam), the Italian natural gas grid operator with two of Italy's LNG import terminals in its portfolio, has signed an accord on switching Italian rail network trains from diesel to hydrogen, a fuel rival to LNG. The Snam memorandum of understanding was signed with Ferrovie dello Stato Italiane SpA, a state-owned holding company that manages infrastructure and services on the Italian rail network.

   Snam and FS Italiane plan to evaluate the technical and economic feasibility of hydrogen rail transport in Italy. “With this agreement, we are taking an important step in promoting a hydrogen value chain in Italy starting from sectors that are crucial for decarbonisation such as the transport of people and goods,” said Snam's Chief Executive Marco Alverà. “Thanks to the collaboration between FS Italiane and Snam, we aim to create infrastructure to rapidly convert trains currently powered by diesel in Italy to hydrogen, thus gaining a technological leadership to be capitalized on also at an international level,” added the Snam CEO.

Italian natural gas network operator Snam, one of Europe’s leading energy infrastructure companies, said it expected Kuwait Petroleum Corp., the Arab Gulf oil and gas company, to select a winner soon to run a liquefied natural gas import facility for which Italy’s grid operator has made a bid through a subsidiary.

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.