|Natural Gas in Italy
Basic facts on natural gas in Italy, from the CIA World factbook, https://www.cia.gov/library/publications/the-world-factbook/
Natural gas - production: 12.96 billion cu m (2004 est.)
Natural gas - consumption: 80.61 billion cu m (2004 est.)
Natural gas - exports: 396 million cu m (2004 est.)
Natural gas - imports: 67.91 billion cu m (2004 est.)
Natural gas - proved reserves: 226.5 billion cu m (1 January 2005 est.)
Italy’s natural gas consumption has increased fast in the last decade, reaching 35 percent of the country’s primary energy consumption, second only to oil. Italy was the third highest consumer of natural gas in Europe in 2004, after Germany and the U.K.
Domestic production has decreased for several years. In 2006 it was 7.6 percent less than in 2004, providing 11.5 percent of Italy’s natural gas consumption.
Italy imports more natural gas every year, with imports reaching 85 percent of total domestic consumption in 2005, up 8.2 percent since 2004.
Italy relies more heavily on imports every year because its fields are ageing and demand is increasing. Algeria and Russia provide Italy with most of its imports of natural gas—Algeria with 37 percent of total imports, Russia with 32 percent. 10.9 percent of Italy’s natural gas comes from the Netherlands, and 7.8 percent from Norway.
Italy has the third biggest natural gas transmission system in Europe (19,000 miles of pipelines).
Trans-Mediterranean “Transmed” or Enrico Mattei pipeline reaches Sicily from the Hassi R’Mel gas field in Algeria, passing through Tunisia on its 670-mile course. Its capacity is 2.33 billion cubic feet per day, but this might be increased in future.
Natural gas reaches Italy from Russia via the Trans-Austrian Gas Pipeline (TAG) at Tarvisio, and via Slovenia at Gorizia.
Natural gas from northern Europe, mainly the Netherlands and Norway, reaches Italy through the Trans-European Pipeline (TENP) and the Transitgas pipeline, which enter at Passo Gries near Milan.
Most recently, the Greenstream pipeline links Mellitah, Libya to Gela, Sicily, connecting Italy to the Western Libya Gas Project. The Greenstream pipeline is 370 miles long and can carry 970 million cubic feet of natural gas per day.
New pipelines have been proposed. By 2009 or 2010, Galsi, a consortium of natural gas companies including Italy’s Enel, Germany’s Wintershall and Algeria’s Sonatrach, could complete another pipeline from Algeria to Italy. By 2010, the Italy-Greece Interconnection (IGI) project, a pipeline from Greece to Italy, could begin functioning. This line will connect Italy to the Turkish grid and the Caspian sea production areas. The projected Trans-Adriatic Pipeline (TAP) would connect Italy to production in the Middle East or other import pipelines from Russia, as well as Albania.
Liquefied Natural Gas (LNG):
About four percent of Italy’s natural gas consumption comes from imported LNG. So far there is only one LNG terminal, at Panigaglia, operated by Snam.
But natural gas companies are planning to build many more LNG terminals. BG’s projected LNG facility at Brindisi on Italy’s southeast coast was set to begin operating by 2010 but has been delayed.
Edison plans to build an LNG receiving terminal on the northern Adriatic coast with help from ExxonMobil and Qatar Petroleum. Initial production should begin in 2008.
In early 2007, the Offshore LNG Terminal consortium, comprising Golar LNG and Italy’s CrossGas, began constructing an offshore storage and regasification facility at Livorno, on Italy’s central western coast. The facility is scheduled to start operating in 2009.
BP, Edison and Solvay (a chemical company) have united to construct an LNG terminal in Rosignano, near Livorno. Troubles with local government could delay the project’s initial production date of 2012.
Spain's Gas Natural (GN) presented plans to build two LNG receiving terminals in Italy, one in Trieste and one in the southern port of Taranto. Neither project has received necessary government or regulatory approval.
With so many LNG terminals planned, Italy will probably export much of its LNG to the rest of Europe.
Eni, ENEL and Edison:
Eni dominates the natural gas sector in Italy. It controls 80 to 84 percent of Italy’s domestic production. Eni’s subsidiaries run Italy’s natural gas transportation system (Snam Rete Gas S.p.A.) and maintain its storage facilities (Stoccaggi Gas Italia S.p.A.). Subsidiary Italgas handles one fourth of the retail natural gas distribution.
Originally state-owned, Eni has shrunk somewhat after Italy began bringing its industry into line with EU liberalization laws. Eni must diminish its holdings in Snam to 20 percent by end of 2007. Still, it remains the dominant presence in Italy’s natural gas sector.
In 2006, Eni’s natural gas sales went up about 4 percent to 97.48 bcm in 2006 because of growth in sales in key European markets. Sales increased by 16 percent in Turkey, Germany and Austria, and France. Liquefied natural gas (LNG) sales were 9.9 bcm, up 41.4 percent from 2005.
In November 2006, Eni and Gazprom signed a long-term deal to launch joint projects in natural gas transmission and technology. The deal extends Russian gas supply contracts to 2035, bolstering Eni’s supply credentials. (See ENI’s annual report 2006 http://www.eni.it/bilancio-interattivo/eng/2006/index.html#)
ENEL, the electricity giant, is Italy’s second biggest distributor and retailer of natural gas. It holds 12 percent of the market, with over 2.3 million customers.
Edison nearly matches ENEL in terms of natural gas operations. It holds second place to Eni in domestic production of natural gas, producing 7.9 percent in 2005.
Natural Gas emergency in 2006:
Italy experienced a major energy shortage in 2006 for several reasons. First, the extremely cold winter caused higher demands for heating. Second, there was an increase in demand from the thermoelectric sector due to new gas power plants. Lastly, Italy suffered from a drastic reduction in imports from Russia because of the cold weather and, furthermore, because of its conflict with Ukraine at that time, which resulted in Russia’s cutting off natural gas supplies to Ukraine and thereby affecting other European countries such as Italy.
In response to the crisis, the government committee in charge ordered imports and domestic production to be maximized. In the second phase of response, the Ministry of Productive Activities met and ordered additional measures to be taken, including interruptions of supply and outages, environmental exceptions, use of oil fuel, etc. The crisis highlighted Italy’s structural weaknesses, namely lack of domestic facilities and dependence on imports, and has caused worries about Italy’s energy security in the approaching winter.
EIA report: http://www.eia.doe.gov/emeu/cabs/Italy/NaturalGas.html
Annual reports from Italian Regulatory Authority on Electricity and Gas (Autorita per l’energia elettrica e il gas): http://www.autorita.energia.it/inglese/index.htm
Eni’s website: http://www.eni.it/home/home.var
Edison’s website: http://www.edison.it/edison/site/it/
Enel’s website: http://www.enel.it/