LNG

SNAM, the Italian natural gas grid and LNG terminals operator, said gas demand in Italy in the first quarter dropped by 19.4 percent to 20.54 billion cubic metres compared with 25.47 Bcm at the same time a year ago even as more LNG cargoes were unloaded at the Panigaglia onshore terminal near Genoa and Italy’s fourth terminal was starting operations at the end of May.

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.

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 natural gas network company and LNG importer SNAM reported a more than 8 percent increase in net profits as more natural gas was used in Italy and it benefited from foreign investments in the Trans-Adriatic Pipeline bringing gas from Azerbaijan and its stake in the Abu Dhabi’s pipelines system in the United Arab Emirates.