TEN-YEAR DEVELOPMENT PLAN OF THE NATURAL GAS TRANSMISSION NETWORK SNAM RETE GAS

Transcription

1 TEN-YEAR DEVELOPMENT PLAN OF THE NATURAL GAS TRANSMISSION NETWORK SNAM RETE GAS

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3 Snam Rete Gas Ten-year network development plan Reference period Document prepared by Snam Rete Gas S.p.A. In compliance with the D.L. 93 of 11 June 2011 and subsequent amendments and additions TEN-YEAR NETWORK DEVELOPMENT PLAN 3

4 Snam Rete Gas publishes the third edition of the Ten-Year Development Plan of its natural gas transportation network, following the second publication of the 2015 in accordance with the Legislative Decree n. 93 of June 1, 2011, issued to transpose the directive 2009/73/EC, as modified by the law n. 115 of 29 July The Plan highlights the commitment of Snam Rete Gas to develop the transportation service, with the aim to encourage the process of network integration at European level. This commitment is realized through the confirmation at European level also in the second list of the Projects of Common Interest ( PCI ) of the main Snam Rete Gas development projects, approved by the European Commission in November Snam Rete Gas development plan is part of a large set of measures already put in place for the market integration, including the early implementation of the rules defined in the European network code in terms of capacity allocation mechanisms. Snam Rete Gas pursues a growth model aimed at creating sustainable value for the shareholders and the community, through investments characterized by high operational and financial efficiency. Snam Rete Gas is aware of its responsibility in the management and development of a strategic infrastructure asset for the country. With a participatory process of consultation, Snam Rete Gas intends to give voice to the wide audience of stakeholders in order to integrate all the signals of interest in the organic preparation of this document. San Donato Milanese, 13th October TEN-YEAR NETWORK DEVELOPMENT PLAN

5 Foreword from the CEO Executive summary Objectives of the document Legislative and regulatory framework Gas demand and supply in Italy Gas infrastructure in italy and in Europe Natural gas transmission network ten-year development plan Objectives and scope of the plan Objectives of the document Scope of the plan Coordination with third partes Ten year plan formation criteria Ten year development plan elaboration process Structure of the document Legislative and regulatory framework European legislative and regulatory framework Directive 2009/73/ec of the european parliament and of the council Regulation (ec) no. 715/2009 of the european parliament and of the council Regulation no. 994/2010 of the european parliament and of the council Regulation (eu) no. 347/2013 of the european partliament and of the council Italian legislative framework Legislative decree no. 93, 1 june 2011 as modified by law n. 115 of july 29, 2015 Resolution n. 351/2016/R/GAS National energy strategy Gas demand and supply in Italy Primary energy consumptions in Italy Natural gas supplies Natural gas demand Supply and demand forecasts in the period Transmission capacity in the period Transmission capacity in the period Coverage of annual demand Gas infrastructure in Italy and in Europe Snam rete gas transmission network National transmission network Regional transmission network Compression plants Critical issues and network congestion Current national production and expected developments

6 Existing storage sites and expected developments Existing lng terminals and expected developments European priorities concerning energy infrastructure Projects of common interest ENTSOG ten year network development plan Strategic plan of european investments Snam Rete Gas transmission network ten year development plan Development plan Design criteria and environment protection National network projects Support to the north-west market and bidirectional cross-border flows Support to the north west market Support to the north west market and bidirectional cross-border flows Interconnection with Slovenia Development for new imports from the south ( adriatic line ) Import developments from north-east Additional southern developments Galsi project Other project concerning the national network Other projects of common interest concerning national network Regional network development projects Lombardia expansions Gavi Pietralavezzara pipeline Connection Pietravairano - Pignataro Maggiore Supplying methane to the Calabria region Connection Projects Cost-benefit analysis Methods Capacity indicators Results of capacity indicators Economic indicators Costs and financing Annex Annex 1: gas demand forecast Annex 2: transmission capacity determination method Annex 3: cost-benefit analysis method Annex 4: project sheets Annex 5: development projects Annex 6: coordination with other operetors Annex 7: results of economic indicators

7 Executive summary

8 OBJECTIVES OF THE DOCUMENT The Ten-Year development plan forms part of the Snam Rete Gas strategy, in continuity with previous development plans, communicated to relevant institutions and stakeholders pursuant to relevant legal or regulatory requirements. The plan illustrates the main development infrastructure projects (hereinafter referred to as projects ) required for both the national transmission and the regional transmission networks owned by Snam Rete Gas, covering the period Decisions at the base of the ten-year plan have been taken in accordance with: European and Italian legislative and regulatory frameworks; National Energy Strategy; ENTSOG Ten-Year Network Development Plan; ten-year scenarios connected to meet natural gas market developments; information submitted by 3rd parties (i.e. project developers and shippers); general strategy of Snam (the parent company of Snam Rete Gas). Snam, listed at the Milan Stock Exchange since 2001, pursues a development strategy finalized to the creation of value through investments realizing sustainable growth, characterized by operative and financial effectiveness. Snam considers the creation of sustainable value for shareholders and for the community as a crucial part of its business model. LEGISLATIVE AND REGULATORY FRAMEWORK The main European legislative and regulatory references concerning with the creation of the ten-year network development plan are the Directive 2009/73/EC of the European Parliament and of the Council, the Regulation 715/2009 of the European Parliament and of the Council and the Regulation 994/2010 of the European Parliament and of the Council. The Directive establishes common rules for the natural gas internal market and provides, together with the national regulation, that every year transmission system operators shall submit to the regulatory authority a ten-year network development plan. The network development plan shall contain the main transmission infrastructure to be realized or developed over a period of ten years. The Regulation no. 715/2009 of the European Parliament and of the European Council establishes a European Network of Transmission System Operators for Gas (the ENTSO for Gas, ENTSOG ) and that it shall adopt a nonbinding Community-wide ten-year network development plan based on national development plans and on guidelines for trans-european energy networks, every two years. Regulation no. 994/2010 of the European Parliament and the Council concerns measures to safeguard security of gas supply. 8 TEN-YEAR NETWORK DEVELOPMENT PLAN

9 Article 6 establishes that by 3 December 2013, the transmission system operators shall adapt the functioning of the transmission systems in part or as a whole so as to enable physical gas flows in both directions on cross-border interconnection points. The Legislative Decree no. 93, 1 June 2011, implements into the national legislation the European Directive 2009/73/EC. With reference to the plan, article 16 of the Decree, as modified by article 26 of Law n. 115 of 29 July 2015 establishes that the transmission system operators communicate the ten-year development plan to the AEEGSI (National Regulatory Authority for Electricity, Gas and Water System) and to the Italian Ministry of Economic Development MiSE, the document should describe the intervention required to safeguard both system adequacy and security of gas supply, taking into account also the cost-effectiveness of investment and environmental protection. Article 8 of the Decree also establishes that the transmission system operators shall adapt the functioning of the transmission systems in part or as a whole so as to enable physical gas flows in both directions on cross-border interconnections with all Member States, including the interconnection between Italy and Central Europe through the pipeline Transitgas in Swiss territory. The Decree n. 65 of 27 February 2013 of MiSE which lists the requirements for the ten-year network plan as been repealed by Law n. 115 of 29 July The Resolution 351/2016/R/Gas implements the article n.16 of Legislative Decree n. 93 of 2011, providing provisions for the consultation of the development tenyear plan of natural gas transmission network. Snam Rete Gas development plan, in line with the normative dictation, contains every measure for the development of the system, lists the motivations on which planning choices are based, giving a cost/ benefit analysis and contextualizes the projects into the European development plans. GAS DEMAND AND SUPPLY IN ITALY The gas demand in Italy* in 2015 has been equal to 67,4 billion of cubic meters, with a growth of about 5.5 billion of cubic meters (+8.9%) from The growth is concentrated in the residential and thermoelectric sectors, both with a growth of about 3 billion of cubic meters. The table below shows the gas demand in Italy divided for final purposes (2013 and 2014 data are aligned to the National Energy Balance published by MiSE). * Gas volumes expressed in Standard Cubic Meters (Scm), with Gross Calorific Value (GCV) amounting to 38.1 MJ/Scm or 10,57275 kwh/scm, in the following tables the value of 10,6 kwh/scm will be represented. Data items expressed in energy terms (MJ) are obtained multiplying physical cubic meters with relevant calorific value. TEN-YEAR NETWORK DEVELOPMENT PLAN 9

10 TABLE 1: NATURAL GAS DEMAND IN ITALY B 10.6 KWH/SCM ABS. VAR VS 2014 RESIDENTIAL AND COMMERCIAL 31,09 25,66 28,61 2,95 11,5% POWER GENERATION 20,60 17,89 20,89 3,01 16,8% INDUSTRY 14,81 14,50 14,01-0,49-3,4% OTHER (*) 1,70 1,82 1,96 0,14 7,7% CONSUMPTION AND LOSSES 1,87 2,05 1,97-0,08-4,0% TOTAL DEMAND 70,07 61,91 67,44 5,53 8,9% VAR% 2015 VS 2014 (*) Including consumptions for Agriculture and Fishing, Chemical synthesis, automotive and bunkering The supply of natural gas in Italy in 2015 amounted to 67.4 billion cubic meters, an increase of approximately 5.5 billion cubic meters (+8.9%) compared to Natural gas imports in 2015 amounted to 60.8 billion cubic meters, representing approximately the 90% of the total and with an increase of import requirements from the previous year by 10%, equal to 5.4 billion cubic meters in absolute value. The increase in imports has helped to offset the reduction in domestic production, which in 2015 recorded a total volume of 6.4 billion cubic meters with a reduction of 7%, about 0.5 billion cubic meters in absolute value. TABLE 2: NATURAL GAS SUPPLY IN ITALY B 10.6 KWH/SCM ABS. VAR VS 2014 IMPORT 61,54 55,36 60,82 5,46 9,9% NATIONAL PRODUCTION (*) 7,46 6,89 6,43-0,48-7,0% VAR% 2015 VS 2014 DELTA STORAGE (**) 0,48-0,86-0,31 0,55-64,1% TOTAL AVAILABILITY OF NATURAL GAS 69,48 61,39 66,94 5,53 9,0% EXPORT (***) -0,28-0,28-0,27 0,01-3,8% GAS INJECTED INTO THE REGIONAL NETWORK OF OTHER OPERATORS 0,05 0,05 0,04-0,01-20,0% OTHER (****) 0,82 0,75 0,73 0,00-0,1% GROSS AVAILABILITY 70,07 61,91 67,44 5,53 8,9% (*) Doesn't include the self-consumption of gas wells (**) Delta withdrawal (+) and injection, including gross consumption for withdrawal/injection (***) Includes transits and exports to San Marino Republic (****) Includes consumptions of LNG terminals, consumptions of storage compressor stations and treatment station of production A gradual growth of about 1,9% every year is foreseen for italian natural gas demand during the ten years period , both for the increase of macroeconomic framework and electric demand, and for the activation of supports to the gas demand, as for example biomethane and increments of natural gas used as fuel in transports. The following table shows annual demand for each market sector. 10 TEN-YEAR NETWORK DEVELOPMENT PLAN

11 TABLE 3: NATURAL GAS AND BIOMETHANE DEMAND FORECAST IN ITALY B 10.6 KWH/SCM RESIDENTIAL AND COMMERCIAL POWER GENERATION VAR. % AVERAGE ANNUAL CHANGE ,6 29,1 26,5 24,4 0,4% -0,8% 20,9 25,9 33,0 36,5 5,5% 4,7% VAR. % AVERAGE ANNUAL CHANGE INDUSTRY 14,0 14,6 14,4 13,9 1,0% 0,2% OTHER (*) 2,0 2,8 4,7 6,5 9,0% 9,1% CONSUMPTION AND LOSSES 2,0 2,3 2,7 2,8 4,0% 3,2% TOTAL DEMAND 67,4 74,6 81,2 84,1 2,6% 1,9% (*) Including consumptions for Agriculture and Fishing, Chemical synthesis, automotive and bunkering Gas imports will continue to be the primary source to satisfy the gas demand and they will be able to increment always more effectively thanks to the growth of the transit role played by the Italian gas system, supported by the developments projects of import and export of the Italian network. TABLE 4: NATURAL GAS AND BIOMETHANE SUPPLY FORECAST IN ITALY B 10.6 KWH/SCM VAR. % AVERAGE ANNUAL CHANGE IMPORT 60,8 65,7 74,6 75,7 1,9% 2,1% NATIONAL PRODUCTION 6,4 10,0 11,7 13,5 11,7% 6,2% EXPORT -0,3-1,1-5,1-5,1 41,6% 34,0% VAR. % AVERAGE ANNUAL CHANGE TOTAL AVAILABILITY (*) 67,0 74,6 81,2 84,1 2,7% 1,9% (*) not including stock variation The planned development of transmission capacities for the ten-year period set by Snam Rete Gas allows to meet both the forecast demand in Italy and exports. In particular it is forcasted the start of export at Passo Gries from 2019 and an increase in export volumes up to 5 billion cubic meters until The following chart illustrates the forecast for transmission capacity and utilization rate over the period, in specific: total capacity is the aggregated technical firm capacity for all entry points interconnected with foreign pipelines and LNG plants, including new capacity; utilization rate is the ratio between import supply (including both domestic consumptions and export) and total capacity. TEN-YEAR NETWORK DEVELOPMENT PLAN 11

12 FIGURE 1: ANNUAL COVERAGE GAS INFRASTRUCTURE IN ITALY AND IN EUROPE As of 31 December 2015, Snam Rete Gas national transmission network comprised 9,630 km of pipeline, while the regional transmission network comprised 22,904 km. TABLE 5: SNAM RETE GAS TRANSPORT NETWORK LENGHT DATA EXPRESSED IN KM VAR. ASS VS 2014 NATIONAL GRID ,7% REGIONAL GRID ,5% TOTAL ,6% VAR. % 2015 VS 2014 The gas network includes eleven compressor stations, with an installed power of 877 MW as of 31 December TEN-YEAR NETWORK DEVELOPMENT PLAN

13 The transmission system: supplies more than 7,000 redelivery points, delivering gas to city distribution networks, industrial consumers and gas-fired power stations; has about 20 interconnection points with both national and regional transmission networks of other transportation companies operating on Italian territory; is connected to about 50 entry points for national production facilities; is connected to numerous storage facilities, which provide the majority of the flexibility required and provide a significant contribution to security of supply in a market strongly dependent on imports. As of the end of 2015, the storage capacity in Italy was about 16 billion cubic meters. This capacity includes 4.6 billion cubic meters of strategic reserve, that are defined by the MiSE to cope with possible gas emergencies. Three LNG terminals are connected to the national network in Italy: Panigaglia, with a capacity of 3.5 billion cubic meters/year; the Adriatic off-shore LNG terminal in Rovigo, with a capacity of 8 billion cubic meters/year; and the OLT off-shore terminal in Livorno, with a capacity of 3.75 billion cubic meters/year. MiSE has already authorized the realization of three new LNG Terminals: Falconara Marittima (developed by Api Nòva Energia, with a capacity of 4 billion cubic meters/year), Gioia Tauro (developed by LNG MedGas Terminal, with a capacity of 12 billion cubic meters/year) and Porto Empedocle (which has also been authorized by Regione Sicilia, developed by Nuove Energie, with a capacity of 8 billion cubic meters/year). Regulation 2013/347/EU of the European Parliament and of the Council establishes the guidelines for trans-european energy infrastructure. The Regulation indicate four priority gas corridors: South North gas interconnection ( NSI West Gas ); South North gas interconnection for Central Eastern and South Eastern Europe ( NSI East Gas ); Southern Gas Corridor ( SGC ); Interconnection plan of Baltic Energy Market ( BEMIP Gas ). TEN-YEAR NETWORK DEVELOPMENT PLAN 13

14 FIGURE 2: EUROPEAN PRIORITIES FOR NATURAL GAS INFRASTRUCTURE (source: Snam from European Commission) The Regulation 2013/347/EU has also established the creation of a group for regional cooperation for each of the corridors. Italy is included in three regional groups (NSI West Gas, NSI East Gas and SGC). Certain priority projects of a cross-border nature or which have a significant impact on cross- border transmission capacity are declared Projects of Common Interest ( PCIs ) and benefit from quicker authorization and permitting procedures, an improved regulatory framework which allows for and may sometimes oblige cross-border revenue recovery, and facilitates access to European financing. PCIs concerning Italy include bidirectional cross-border flow projects between Italy and Switzerland (i.e. at Passo Gries interconnection point), and the Adriatica pipeline. All PCIs are presented in ENTSOG s Ten-Year European Network Development Plan, which is also a reference for national gas network development plans. NATURAL GAS TRANSMISSION NETWORK TEN-YEAR DEVELOPMENT PLAN Snam Rete Gas has produced a transmission network development plan consistent with the Transport infrastructures to build or to improve in the next ten years, in accordance with the expected development of the market and which meets the requirements of security of supply, European market integration and the development of gas supplies to Italy. The most significant projects of the plan are the realization of the project "Support to the North West market and bidirectional cross-border flows" and the creation of the new Linea Adriatica ( Adriatica pipeline ). The first is mainly aimed at the flexibility and security of supply in the market in 14 TEN-YEAR NETWORK DEVELOPMENT PLAN

15 the North West of the country and at the creation of export capacity at the interconnection points of Tarvisio and Passo Gries; the second project is functional to increase import capacity from South of Italy. With particular respect to the first project mentioned above, the construction activities have already begun for the enhancement of transport in the Po Valley, which makes possible the management of gas flows in the north-west of the country in the absence of input flows by Passo Gries and also the availability of an export capacity. The plan includes also transportation network development projects aimed at upgrading the network on the South and from the North East corridors, which today are under investigation. The projects are functional to possible new sources of supply from abroad through pipelines and LNG terminals. The start of the construction phases of the projects for new capacity at entry points is, however, conditional on the contractual commitments for the use of transport capacity, according to the Network Code of Snam Rete Gas. Developments foreseen by Snam Rete Gas, except the specific connections to the network, are not necessarily tied to specific projects of import. Current projects are designed to prepare the development of new transport capacity both from South and from North - East. The plan contains also the main development projects of regional metwork. Attacched to the plan is available le complete list of all the projects included in the ten year development plan. TEN-YEAR NETWORK DEVELOPMENT PLAN 15

16 FIGURE 3: MAIN NATIONAL GRID PROJECTS FIGURE 3: MAIN NATIONAL GRID PROJECTS The following tables show the network capacity development projects with The following tables show the network capacity development projects with details about commissioning date and investment decisions state. In details about commissioning date and investment decisions state. In particularthe tables represent the projects for the three years and particularthe tables represent the projects for the three years and those for which the entry into service is expected in following years. those for which the entry into service is expected in following years. TABLE 6: DEVELOPMENT PROJECTS FOR THE PERIOD TABLE 6: DEVELOPMENT PROJECTS FOR THE PERIOD PROJECT NAME SUPPORT TO THE NORTH WEST MARKET AND BIDIRECTIONAL CROSS-BORDER FLOWS EXPECTED AVAILABILITY OF CAPACITY FINAL INVESTMENT DECISION 2018 YES TABLE 7: DEVELOPMENT PROJECTS FOR THE PERIOD PROJECT NAME SUPPORT TO THE NORTH WEST MARKET AND BIDIRECTIONAL CROSS-BORDER FLOWS EXPECTED AVAILABILITY OF CAPACITY FINAL INVESTMENT DECISION 2018 YES TABLE 7: DEVELOPMENT PROJECTS FOR THE PERIOD PROJECT NAME EXPECTED AVAILABILITY OF CAPACITY FINAL INVESTMENT DECISION PROJECT NAME EXPECTED AVAILABILITY OF CAPACITY FINAL INVESTMENT DECISION DEVELOPMENT FOR NEW IMPORTS FROM THE SOUTH ("ADRIATICA LINE") 2023 NO DEVELOPMENT FOR NEW IMPORTS FROM THE SOUTH ("ADRIATICA LINE") 2023 NO INTERCONNECTION WITH SLOVENIA 2023 NO INTERCONNECTION WITH SLOVENIA 2023 NO IMPORT DEVELOPMENTS FROM NORTH-EAST TO BE DEFINED NO IMPORT DEVELOPMENTS FROM NORTH-EAST TO BE DEFINED NO ADDITIONAL SOUTHERN DEVELOPMENTS TO BE DEFINED NO ADDITIONAL SOUTHERN DEVELOPMENTS TO BE DEFINED NO GALSI PROJECT TO BE DEFINED NO GALSI PROJECT TO BE DEFINED NO 16 TEN-YEAR NETWORK DEVELOPMENT PLAN

17 The main regional development projects, considered in the present document, are located in Liguria, Lombardia, Campania and Calabria. In particular, several network expansion projects are planned in Calabria within the framework of natural gas supply development of the region. The network development plan has been assessed with a cost/benefit analysis, using some indicators included in the methodology defined by ENTSOG. The cost/benefit analysis demonstrates, notwithstanding the reliance on imported gas, good security of supply, with good diversification of supply sources and routes, and a high degree of flexibility for users. Broadly speaking, the transmission network projects described in the plan beneficially increase the security of supply, competitiveness and market integration of the Italian gas market. The cost-benefit analysis supports the social and economic sustainability of all the listed projects. TEN-YEAR NETWORK DEVELOPMENT PLAN 17

18 Objectives and scope of the plan

19 OBJECTIVES OF THE DOCUMENT This document presents the Snam Rete Gas ten-year development plan, in compliance with the Legislative Decree n. 93, 1 June 2011, as modified by Law n. 115 of 29 July 2015 and Resolution n. 351/2016/R/Gas. In addition to the supply and demand forecasts and the plans for the development of the Snam Rete Gas transmission network, this document illustrates the legislative, regulatory and economic framework. This document identifies both the assessment criteria that have been adopted to create the ten-year network development plan and the elements on which the planning decisions have been taken. The Ten-Year development plan has been elaborated on the basis of previous development plans, as published by Snam Rete Gas and communicated to the relevant institutions and stakeholders pursuant to the provisions of the relevant laws and regulations. The development plan highlights potential areas of investment considering previous approved investment decisions. SCOPE OF THE PLAN Present ten-year development plan includes the main national and regional transmission network projects being developed by Snam Rete Gas and by the other national or international gas operators. The plan, in compliance with the formation criteria listed in the following section, considers the indications received by sponsors of projects whose realization is forecasted during the period, taking account of the criteria referred to the next chapter. The plan also contains a qualitative description of some of the major projects which have not yet been defined, but whose preliminary engineering activities and purchase of permits fall within the plan period. Developments and upgrades in transmission networks not owned by Snam Rete Gas and international developments are not considered in the plan. Projects included in the scope of this ten-year plan will be realized subject to the final investment decision by Snam Rete Gas and the applicable regulatory and contractual frameworks. In compliance with relevant legislation, the ten-year network plan will be reviewed each year. TEN-YEAR NETWORK DEVELOPMENT PLAN 19

20 COORDINATION WITH THIRD PARTIES Snam Rete Gas carries out an annual coordination with subjects who actively or potentially operate infrastructures interconnected with its network. The following forms of coordination adopted by the various parties are collected. NATIONAL GAS TRANSMISSION SYSTEM OPERATORS In addition to Snam Rete Gas the natural gas transportation business is carried out in Italy by eight other companies. Snam Rete Gas has carried out coordination activities with the natural gas transportation companies through meetings finalized to the exchange of informations on planned projects in the time frame of the plan and/or exchange of technical documentation of the projects. It was also decided to check the progress of investments, any network adaptation actions necessary to enable the realization and any overlaps between the activities of different operators. Resolution 351/2016 also provides that the main transport company lists in a specific annex of its plan scheme, the projects contained in the Plan schemes of the other operators of the transport system and indicates any interventions adjustment necessary on its own network for the realization of the projects contained in the plans of other operators, as well as any overlaps between the activities of the different operators of the transport system. The informations are contained in the Annex 6. EUROPEAN TRANSPORT NETWORKS' OPERATOR The EU Regulation 984/2013 of the European Commission, establishing a network code relating to capacity allocation mechanisms in gas transportation systems ("CAM code"), provides in Article 6 that the interconnected operators share a method for aligning related capacity at the same point of interconnection. The method should provide a thorough analysis of the capabilities offered also in order to maximize the capacity offered on the point. Snam Rete Gas and the interconnected European operators have determined a methodology which provides, among other things, the obligation to exchange informations relating to future changes in capacity on the interconnection points involved as a result of development projects, with particular reference to the expected within the ten-year plan for the network development at European level. Consequently annually they are carried out coordination meetings and exchanges of documents, together with the definition of the transport capacity process that ends with the end of January. Data from this coordination are also used for the preparation of the Ten-Year Plan of Snam Rete Gas. OPERATORS OF GAS TRANSMISSION NETWORKS OUTSIDE EU As for the point of Passo Gries, coordination is ensured by regular meetings that Snam Gas Rete places in order to create synergies with its investments and share timing and commissioning of the development projects related to the 20 TEN-YEAR NETWORK DEVELOPMENT PLAN

21 point. As for the points of Mazara del Vallo and Gela coordination is ensured by the provisions of the Interconnection Point Agreement concluded between Snam Rete Gas and the foreign operators interconnected on these points. OTHER STAKEHOLDERS Snam Rete Gas carries out every year the demand for information and data to interested parties in order to collect and update the data transmitted by them. The project cards collected in 2015 are 11 and are summarized in Annex 4. TEN-YEAR PLAN FORMATION CRITERIA The ten-year plan lists all the development projects relating the transport infrastructures to be built or upgraded over the period of the plan, whose complete list is provided in Annex 5. About the national grid, decisions on which the ten-year development plan is based are founded on a series of criteria and considerations that Snam Rete Gas considers in a well-balanced and consistent manner. One of the formation criteria regards compliance with the European and national legislative framework and with the AEEGSI regulatory framework. Snam Rete Gas adopts specific capacity developments when required by the criterion. The requirement for bi-directional capacity as indicated by the Regulation no. 994/2010 of the European Parliament and of the Council, and by the Legislative Decree no.93, 1 June 2011 is an example of what said above. A further criterion used in creating the plan regards the coherence with the National Energy Strategy ("SEN") and with ENTSOG ten-year network development plan. SEN, in particular, gives indications on the capacity development for gas imports from the Caspian area and for other import projects through LNG, as well as for counter-flow capacity development. Snam Rete Gas s ten-year network plans, in coherence with ENTSOG ten years network development plan includes the PCIs of its relevance. Furthermore, capacity developments in the plan are adequate to the ten-years scenarios of market development (which is also in compliance with Article 1 of the Legislative Decree no. 93, 1 June 2011). For example, the bi-directional capacity development project is coherent with forecast developments for gas supply in Southern Europe (i.e. for Italy, the new imports through gas pipelines and new LNG terminals), in compensation of the reduced domestic production of the North European regions. The coordination with third parties and the "project sheets" collected during the gathering of documentation for the elaboration of the plan - described in the previous paragraph - represent further reference elements used for the development of the Ten-year development plan such as information related to new delivery points, possible Open Season procedures and information gathered during the coordination meetings with the national and international infrastructural operators. Information on project schedule and capacity provided via the project sheets or obtained during the cooperation TEN-YEAR NETWORK DEVELOPMENT PLAN 21

22 with third parties has been considered in order to guarantee the overall coherence between development projects. With reference to some PCI project and some project presented in the collected project sheets, the consistency between project progress and period of the ten years plan plays a critical role. About the regional network, the planned projects regard: 1. The creation of new transmission capacity in order to sustain over the medium - long term increases in demand for natural gas, registered in a specific area; 2. The strengthening (and/or extension, in the case of a new catchment area) of the network following the implementation of new delivery points, or new points of interconnection with other transport networks. Snam, which owns 100% of the shares of Snam Rete Gas, and is listed on the Milan Stock Exchange, pursues a growth model finalized to the creation of value through investments realizing sustainable growth, characterized by functional and financial effectiveness. The Snam Rete Gas ten year plan considers the creation of sustainable value for shareholders and for the community as a crucial part of its business model. TEN-YEAR DEVELOPMENT PLAN ELABORATION PROCESS Snam Rete Gas, following the coordination phase with third subjects and the information request, send the ten year plan to AEEGSI and to the Ministry of Economic Development, with the details of the choices made with the projects and the information received by stakeholders. AEEGSI, as per art. 16 of the legislative decree 93 of 11 June 2011 and as per Resolution 351/2016/R/gas, puts the plan under open and transparent consultation and makes public the results of this consultation. STRUCTURE OF THE DOCUMENT The document is made up of the Executive Summary and of the following chapters. First chapter ( Objectives and scope of the plan ) which lists the aims of the ten-year development plan, outlines its scope, and lists the criteria used in evaluating developments. Second chapter ( Legislative and Regulatory Framework ) describes the laws, European and national, that establish the ten-year network plan and specify its requirements. In addition, the chapter lists all the legislative references that have been referred to elaborate the plan. Third chapter ( Gas Demand and supply in Italy ) illustrates the Italian natural gas demand scenarios as forecast by Snam Rete Gas and describes the transmission capacity trend as forecast for the next ten years. In the same chapter are available data regarding the utilization rate of the network. Fourth chapter ( Gas Infrastructure in Italy and in Europe ) presents a detailed description of the characteristics of the Italian gas transmission network and of 22 TEN-YEAR NETWORK DEVELOPMENT PLAN

23 the ares in which it is functionally divided. Critical issues and congestion present and expected are also identified. In the same chapter are presented the other national facilities, as storage facilities and LNG regasification facilities, including forecast development based on publicly available information. The chapter also shows the infrastructural development plans as defined by the European Commission. Fifth chapter ( Snam Rete Gas transmission network ten-year developement plan ) is the core of the document, and contains the development plan of Snam Rete Gas. The chapter lists the potential projects expected over the period, highlighting those which are planned to be operational within the next three years, as well as cost/ benefit analyses and financial requirements. Finally, the Annexes illustrate the criteria used in the evaluation: natural gas demand and supply forecasts (Annex 1); transmission capacity calculations (Annex 2) and cost/benefit analyses (Annex 3). In addition, the Annex contains a summary of the project sheets received from relevant stakeholders during the planning process (Annex 4), the complete list of the developement projects (annex 5), the list of the projects of other operators (annex 6) and the results of the economic indicators (Annex 7). TEN-YEAR NETWORK DEVELOPMENT PLAN 23

24 Legislative and regulatory framework

25 EUROPEAN LEGISLATIVE AND REGULATORY FRAMEWORK The European reference is the following: Directive 2009/73/EC of the European Parliament and of the Council, concerning common rules for the internal market in natural gas; Regulation 715/2009/CE, concerning the access to the natural gas transmission networks; Regulation 994/2010/CE concerning measures for safeguarding security of natural gas supply; Regulation 347/2013/CE of the European Parliament and of the Council about guidelines for trans-european energy infrastructure. DIRECTIVE 2009/73/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL Directive 2009/73/EC, of 13 July 2009, establishes common rules for the transmission, the distribution, the supply and the storage of natural gas. It lays down the rules for organizing the natural gas sector, market access, the criteria and applicable procedures for issuing transmission, distribution, supply and gas storage licenses, as well as the principles of system management. Article 9 of the Directive requires Member States to ensure that, from 3 March 2012, each undertaking which owns a transmission system acts as a transmission system operator. Article 22 of the Directive Network development and powers to make investment decisions establishes that every year, transmission system operators shall submit to the regulatory authority a ten-year network development plan based on present and forecasted gas supply and demand after having consulted all the relevant stakeholders. The plan (i) is required to indicate the main transmission infrastructure that will need to be built or upgraded over the following ten years. The plan (ii) is required to identify all the investments already committed and identify any new investments that will be executed in the next three years, as well as (iii) provide a time-frame for each investment project. The regulatory authority is required to consult all system users, present or potential, on the ten-year network development plan. Furthermore, the regulatory authority should examine whether the ten-year network development plan covers all investment needs identified during the consultation process, and whether it is consistent with the non-binding Community-wide ten-year network development plan (ENTSOG). Lastly, the regulatory authority should monitor and evaluate the implementation of the ten-year network development plan. TEN-YEAR NETWORK DEVELOPMENT PLAN 25

26 REGULATION (EC) NO. 715/2009 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL The Regulation (EC) no. 715/2009 of the European Parliament and of the Council of 13 July 2009 (and subsequent amendments and additions), related to the transmission network access conditions, establishes the constitution of ENTSOG, and sets out its obligations. These obligations include the regular generation and publication of a non-binding European wide ten-year network development plan ("TYNDP") and a forecast on the adequacy of supply within Europe TYNDP has been published in march 2015 on ENTSOG internet website. The Community-wide network development plan is intended to be built on national investment plans, and should take into account regional investment plans ("GRIP") and the guidelines for trans- European energy networks (PCI). Annex to the Regulation (EC) no. 715/2009 establishes the principles of capacity-allocation mechanisms and congestion-management procedures concerning transmission system operators and their application in the event of contractual congestion (e.g. over-subscription and buy-back). This mechanism establishes a new relation between technical capacity and contracted capacity with possible implications on the evaluation of investments on future network developments. REGULATION NO. 994/2010 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL The Regulation (EC) no. 994/2010 of the European Parliament and of the Council of 20 October 2010 concerns measures to safeguard security of gas supply. Article 6, clause 1, establishes that Member States shall ensure that the necessary measures are taken so that by 3 December 2014 at the latest, in the event of a disruption of the single largest gas infrastructure, the capacity of the remaining infrastructure (determined according to the N 1 formula, with exceptionally high gas demand occurring with a statistical probability of once in 20 years) is able to satisfy total gas demand. This is without prejudice, where appropriate and necessary, to the responsibility of system operators to make the corresponding investments and to the obligations of transmission system operators. Article 6, clause 5, establishes that transmission system operators shall enable permanent bi- directional capacity on all cross-border interconnections between Member States as early as possible and at the latest by 3 December TEN-YEAR NETWORK DEVELOPMENT PLAN

27 REGULATION (EU) NO. 347/2013 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL The Regulation (EU) no. 347/2013 of the European Parliament and of the Council establishes the guidelines for PCI. Article 3 establishes that Projects of Common Interest shall become an integral part of the relevant regional investment plans, under Article 12 of Regulations (EC) No 714/2009 and (EC) No 715/2009, and of the relevant national 10-year network development plans, under Article 22 of Directives 2009/72/EC and 2009/73/EC and other national infrastructure plans concerned, as appropriate. The regulation also provides that PCI are part of the latest ten-year network development plan (TYNDP) developed by ENTSOG. In this sense, even the projects proposed as candidates for PCI have to be submitted to ENTSOG for inclusion in TYNDP. The process of composition of lists of PCI is done on a biennial basis and also to projects already selected in the previous list applies the selection process, in order to confirm the requirements of Community. ITALIAN LEGISLATIVE FRAMEWORK The national legislative framework establishing the obligation to prepare a tenyear plan is constituted by the Legislative Decree no. 93, 1 June 2011 and by Resolution n. 351/2016/R/gas. LEGISLATIVE DECREE NO. 93, 1 JUNE 2011 AS MODIFIED BY LAW N. 115 OF JULY 29, 2015 Legislative Decree no. 93, 1 June 2011, transposes the European Directive 2009/73/EC into national legislation. Article 1 confers to the Ministry of Economic Development the competence to provide guidance and set rules on national energy policy with a view to guaranteeing security of supply. The Ministry is also conferred the task of defining ten-year development scenarios for the natural gas market, including the forecasting of demand and for identifying any necessary infrastructure upgrades. Article 16 of the Decree establishes that system operators should submit to AEEGSI and to MiSE a ten-year network development plan once a year, and that it shall include all the necessary interventions for guaranteeing the adequacy of the system and security of supply. Article 8 establishes that system operators should realize firm bi-directional cross-border capacity at EU and Swiss cross-border interconnection points. TEN-YEAR NETWORK DEVELOPMENT PLAN 27

28 RESOLUTION N. 351/2016/R/GAS The Resolution gives the provisions for consultation of the development plan of the natural gas transmission network, prepared by the owners of the transport system in accordance with Article 16 of Legislative Decree 93/2011, as amended by Law 115 / Inside of the Resolution it is detailed the procedure for the drawing of the "Gas network development plans" of Italian operators and the modalities of the public consultation process. NATIONAL ENERGY STRATEGY The final part of the Italian legislative and regulatory framework is the SEN. The SEN has been approved via an inter-ministerial Decree on 8 March One of the aims of the SEN is to improve security of supply, especially in the natural gas sector, and to reduce the dependence on imports. The SEN identifies specific measures to enhance competitiveness of the gas market, as well as supporting the concept of a South-European hub. The SEN lists a series of new strategic infrastructure projects that are to be built, and includes particular reference to storage capacity, LNG terminals and other import infrastructure. Another aim of the SEN is to facilitate the ability to receive gas from the Southern Corridor, allowing Italy to import gas from the Caspian region via the Trans- Adriatic Pipeline (TAP). Moreover, SEN intends to facilitate the development of new routes of import, with particular attention to the possible evolution of the project GALSI from Algeria and new projects of gas import from the Mediterranean area. About the the LNG market, SEN states that regasification capacity must increase up to 8-16 Bcm (8 Bcm in case of realization of TAP gas pipeline) to improve LNG access in the Italian market and to increase supply diversification. The SEN also promotes the availability of virtual and physical reverse-flow capacity towards the markets of Central and Northern Europe. 28 TEN-YEAR NETWORK DEVELOPMENT PLAN

29 Gas demand and supply in Italy

30 PRIMARY ENERGY CONSUMPTIONS IN ITALY In 2014 demand of primary energy in Italy amounted to 167 Mtoe. The figure can be framed into the downward trend of primary energy consumption started several years ago which, in the period , contracted at an average rate of 1.9% per annum. Peak primary energy consumption (197.8 Mtoe) occurred in The 2008 economic crisis has further contributed to contraction in the demand of primary energy, with an annual contraction of about 2.3% in the perod During the three-year period , the consumption of primary energy in Italy has contracted at an average rate of -3% per annum, from Mtep in 2012 to 167,0 Mtep in In the same three-year period renewable sources (wind and solar) have further increased its weight on the energy mix, also because of the support policies in particular in the electricity generation sector, and grew at an average annual rate of 14.2%. In 2014 the energy produced from renewable sources, excluding hydroelectric contribution, covered approximately 21% of primary energy demand in Italy. The drop in demand and the increased availability of energy from renewable sources, including the increase recorded in hydroelectric, have resulted in a three-year reduction in energy consumption from fossil fuels, with an average annual decline of 6.9%. In particular, the consumption of natural gas was reduced by an average annual rate of 9.1%, from 61.4 Mtoe in 2012 to around 50.7 Mtoe in 2014 (about 31% of primary energy consumption). This reduction was mainly caused by the reduction of gas consumption in the thermoelectric sector which, in a scenario of electricity demand reduction, on the one hand it undergoes generation competition coal through the coal competitive prices and EUA prices at historic lows, on the other was affected by an exceptionally high hydropower production from the years 2013 and Oil products have seen a contraction of demand from 62.2 Mtoe in 2012 to 57.2 Mtoe in 2014 (35% of primary energy consumption) with an average annual reduction of 4.1%, while solid fuels recorded a reduction of 6.1%, from 16.7 Mtoe in 2012 to 13.7 Mtoe in 2014 (8% of primary energy consumption). It was stable the import of electricity between 2012 and 2014, amounting to 9.7 Mtoe (6% of primary energy consumption). 30 TEN-YEAR NETWORK DEVELOPMENT PLAN

31 FIGURE 4: PRIMARY ENERGETIC CONSUMPTIONS IN ITALY (Mtep) NATURAL GAS SUPPLIES In 2015, total natural gas supplies to Italy (*) amounted to 67.4 billion cubic meters, an increase of 5.5 billion cubic meters (+8.9%) from Imports in 2015 amounted to 60.8 billion cubic meters, reflecting approximately 90% of total supplies, with an increase of imports from the previous year of about 10% (5.5 billion cubic meters). The increase in imports has helped to compensate the reduction in the availability of domestic production, which in 2015 recorded a total volume of 6.4 billion cubic meters, with the 7% decrease, about 0.5 billion cubic meters in absolute terms. The following table shows the gas supply in Italy, as indication of the utilization rate of the grid, in the period (*) Gas volumes expressed in Standard Cubic Meters (Scm), with Gross Calorific Value (GCV) amounting to 38.1 MJ/Scm or 10,57275 kwh/scm, in the following tables the value of 10,6 kwh/scm will be represented. Data items expressed in energy terms (MJ) are obtained multiplying physical cubic meters with relevant calorific value. TEN-YEAR NETWORK DEVELOPMENT PLAN 31

32 TABLE 8: NATURAL GAS SUPPLY IN ITALY B 10.6 KWH/SCM ABS. VAR VS 2014 IMPORT 61,54 55,36 60,82 5,46 9,9% NATIONAL PRODUCTION (*) 7,46 6,89 6,43-0,48-7,0% VAR% 2015 VS 2014 DELTA STORAGE (**) 0,48-0,86-0,31 0,55-64,1% TOTAL AVAILABILITY OF NATURAL GAS 69,48 61,39 66,94 5,53 9,0% EXPORT (***) -0,28-0,28-0,27 0,01-3,8% GAS INJECTED INTO THE REGIONAL NETWORK OF OTHER OPERATORS 0,05 0,05 0,04-0,01-20,0% OTHER (****) 0,82 0,75 0,73-0,02-3,1% GROSS AVAILABILITY 70,07 61,91 67,44 5,50 8,9% (*) Doesn't include the self-consumption of gas wells (**) Delta withdrawal (+) and injection, including gross consumption for withdrawal/injection (***) Includes transits and exports to San Marino Republic (****) Includes consumptions of LNG terminals, consumptions of storage compressor stations and treatment station of production The table below illustrates changes in imports in the three year period , split between pipeline and LNG. TABLE 9: NATURAL GAS IMPORT IN ITALY B 10.6 KWH/SCM ABS. VAR VS 2014 VAR% 2015 VS 2014 PIPELINE IMPORT 55,93 50,87 54,93 4,06 8,0% LNG IMPORT 5,61 4,49 5,89 1,40 31,1% TOTAL IMPORT 61,54 55,36 60,82 5,46 9,9% It is pointed out in 2015 the return to similar import values to those of 2013, after the economic situation of 2014 characterized by an abnormal reduction in demand with a climatic condition characterized by great rainfall in the year, a particularly cool summer and rainy and temperatures above the standard during the winter. The following table shows the breakdown of imports for entry point. Even 2015, as in 2014, is characterized by a limited use of imports from the South. The import levels from the entry points of Mazara del Vallo and Gela show an overall increase of approximately 1.1 billion cubic meters (+ 8%) compared to the 2014 data. The largest increase in absolute terms is recorded instead of the Tarvisio entry point, which sees an increase in import volumes of about 3.8 billion cubic meters (+ 14%). The increase in imports from the East was partly offset by a reduction in imports from Northern Europe via Passo Gries, where there was a reduction of about 0.8 billion cubic meters (-7%). During 2015, the price dynamics in the oil market, fell during the year by 40%, resulted in a condition of re-alignment of the LNG prices between the Asian and European markets, contributing to the resumption of imports of LNG in Europe, with a increase for Italy of about 24%. Imports from Cavarzere terminal reach 5.8 billion cubic meters, with an increase of 30% compared to 2014, while remain negligible the import contributions of Panigaglia and Livorno terminals, used with a peakshaving winter function. 32 TEN-YEAR NETWORK DEVELOPMENT PLAN

33 TABLE 10: NATURAL GAS IMPORT FOR EACH ENTRY POINT B 10.6 KWH/SCM ABS. VAR VS 2014 VAR% 2015 VS 2014 TARVISIO 30,26 26,15 29,92 3,77 14,4% MAZARA DEL VALLO 12,46 6,78 7,24 0,47 6,9% PASSO GRIES 7,49 11,43 10,64-0,79-7,0% GELA 5,70 6,51 7,11 0,60 9,1% GORIZIA 0,01 0,03 0,03 CAVARZERE (GNL) 5,35 4,47 5,80 1,33 29,7% PANIGAGLIA (GNL) 0,06 0,02 0,05 0,03 LIVORNO (GNL) 0,21 0,04 0,04 GROSS AVAILABILITY 61,54 55,36 60,82 5,46 9,9% NATURAL GAS DEMAND In 2014, natural gas demand in Italy amounted to 67.4 billion cubic meters, with an increase of 5.5 billion cubic meters (+8.9%) from The increase was concentrated in the residential and power generation, with an increase in gas consumption for both of about 3.0 billion cubic meters. As already briefly mentioned, under these increases there is a return in 2015 to a state climate closer to normal than exceptional nature of In particular, in 2015 the trend of the average winter temperature, less different than the normal climate, has influenced the demand for gas in the civil sector, supporting the consumption of gas for heating. Demand for gas for thermoelectric use has benefited, on the one hand, of a summer characterized by high temperatures which have supported the demand for electricity for air conditioning, and on the other of a reduced rainfall which favored the return of hydroelectric generation to normal levels after the exceptional nature of The table below includes a segmental analysis of the gas demand in Italy for final consumers (2013 and 2014 data are aligned to the National Energy Balance published by MiSE). TABLE 11: NATURAL GAS DEMAND IN ITALY FOR FINAL USE B 10.6 KWH/SCM ABS. VAR VS 2014 RESIDENTIAL AND COMMERCIAL 31,09 25,66 28,61 2,95 11,5% POWER GENERATION 20,60 17,89 20,89 3,02 16,8% INDUSTRY 14,81 14,50 14,01-0,49-3,4% OTHER (*) 1,70 1,82 1,96 0,14 7,7% CONSUMPTION AND LOSSES 1,87 2,05 1,97-0,08-4,0% TOTAL DEMAND 70,07 61,91 67,44 5,53 8,9% VAR% 2015 VS 2014 (*) Including consumptions for Agriculture and Fishing, Chemical synthesis, automotive and bunkering In spite of the decline in annual demand, peak day demands have been maintained. In this regard it is noted that the maximum daily peak demand was achieved in 2012 (February 6) in conjunction with particularly cold weather conditions that have affected both Italy and neighboring countries. The daily TEN-YEAR NETWORK DEVELOPMENT PLAN 33

34 peak demand is in fact affected by extreme weather events (exceptional cold), in particular in relation to the structure of the Italian market, which sees natural gas as a primary source for civil heating. To this effect was added, with increasing importance in recent years, especially compared to the daily peak demand, the role of back-up that the thermoelectric gas plays in relation to the contribution of electricity generation from renewable sources. SUPPLY AND DEMAND FORECASTS IN THE PERIOD The forecasts of gas demand and supply scenarios are developed,for the ten year development plan of Snam Rete Gas, taking into account the scenarios developed at European and world level. As a result, the forecasts of the plan are consistent with those presented in the plan network development at European level. The criteria at the basis of the scenarios are presented below. The evolution of the demand for gas in Italy in the next decade will be affected by energy and environmental policy decisions that will be taken to achieve the goals of containing emissions, penetration of renewable and energy savings expected in 2020 and In particular, new "2030 Climate & energy Framework" defines at Community level by 2030 the binding targets for emission reductions (-40%) and penetration of renewable (+ 27%), with a target for energy saving (-27%). The paths to achieve those objectives may be different, and depending by the technologies considered in the evolution of sectorial consumptions and by the use of some renewable sources compared to others in the process of decarbonizing of energy. Snam has developed an evolving scenario of gas demand reaching the objectives of the "2030 Climate & Energy Framework", privileging a decarbonization strategy that optimizes existing resources and infrastructure and the role of gas in electricity generation, through the development of biomethane, a programmable renewable source which can be wheeled through the gas transport network to the combined cycle power plants. The use of biomethane in the combined cycle thermal power generation in fact allows such technology, characterized by high performance, to have an active part in the progressive decarbonization of electricity generation mix, contributing to the optimization of costs that the system will have to implement to receive and integrate the renewables. The scenario is based on a recovery of the macroeconomic situation and of the demand for electricity since 2015, with an estimated GDP growth of 0.9% in the decade. In this context, the gas demand in Italy will grow over the decade of around 1.9% annual average in a changing scenery of the energy mix of the country in line with the expected environmental objectives. In the scenario, with the positive contribution to the gas demand resulting from the development of biomethane, the gradual increase in the use of gas (compressed and liquefied) in transports has been also considered, thanks to high emission limits for engines by TEN-YEAR NETWORK DEVELOPMENT PLAN

35 In particular, for biomethane, it is predictable a contribution to the demand for natural gas up to about 5.8 billion cubic meters in 2025, with significant growth in the last years of the current decade. The volume of biomethane is estimated taking into account the development of an agricultural / industrial chain for the production of biomethane from both agricultural matrix and waste. Biomethane is a renewable source characterized by greater programmability compared to photovoltaic and wind power, and it can contribute to a more efficient use of infrastructure and gas electric generating plants, with cost savings in the electric transmission system. The growth in gas demand is mainly driven by consumption in the thermoelectric sector related to the economic recovery which supports the demand for electricity, which is expected to increase by about 0.7% per year. In this context, the consumption of gas in the production of electricity can grow with an annual average of 4.7%, in particular if it developed the contribution of biomethane. The development of the chain of biomethane makes it possible to: increase consumption of gas power plants by about 50% in the period, limiting the growth of their greenhouse gas emissions to 15% (*), thus contributing to a power generation industrially efficient and environmentally sustainable; increase the volumes transported up to 5.8 billion cubic meters additional by 2025, increasing the role of gas infrastructure as a "partner" of the development of renewables. For the transport sector is expected a considerable growth of CNG for the private transport (around 1.2 billion cubic meters compared to 2015 ), favored by more stringent emission constraints from 2020 for engines and by development of LNG as fuel for heavy road transport and maritime transport, according to the guidelines laid down by Directive 2014/94 / EU "Deployment Alternative Fuel Infrastructure "as well as for the satisfaction of industrial demand not connected to the gas transmission network (for a total of about 1.0 billion cubic meters by 2025). Even in gas use for vehicles, especially in CNG, it expected a share of biomethane consumption of 0.9 billion cubic meters in 2025, which helps to satisfy European obligations consumption of sustainable biofuels in the transport sector. In the time period considered, it is expected however in the residential and tertiary sectors a prospective reduction in consumption of 0.8% per year due to the increase of energy efficiency of buildings, the efficiency of heating boilers with replacement of traditional systems with condensing boilers and to the penetration of renewable sources in the heating sector through biomass, solar thermal, and gradual spread of electric heat pumps. (*) The gas carbon intensity used in electric production falls of 21%, from 1.95 kgco2/cm in 2014 to 1.55 kgco2/cm in TEN-YEAR NETWORK DEVELOPMENT PLAN 35

36 The industrial sector is instead expected to remain stable at around current levels with a slight recovery in consumption (0.2%). The dynamics of consumption in the decade sees a recovery in consumption in the early years thanks to the consolidation of the economic recovery, and then, in the second part of the decade, a reduction due to a recovery in efficiency that exceeds the growth connected with economic growth. The table below shows the breakdown of the annual consumption expected by market segment. TABLE 12A: NATURAL GAS AND BIOMETHANE DEMAND FORECAST IN ITALY Hight case scenario B 10.6 KWH/SCM RESIDENTIAL AND COMMERCIAL VAR. % AVERAGE ANNUAL CHANGE ,6 29,1 26,5 24,4 0,4% -0,8% POWER GENERATION 20,9 25,9 33,0 36,5 5,5% 4,7% INDUSTRY 14,0 14,6 14,4 13,9 1,0% 0,2% OTHER (*) 2,0 2,8 4,7 6,5 9,0% 9,1% VAR. % AVERAGE ANNUAL CHANGE CONSUMPTION AND LOSSES 2,0 2,3 2,7 2,8 4,0% 3,2% TOTAL DEMAND 67,4 74,6 81,2 84,1 2,6% 1,9% (*) Including consumptions for Agriculture and Fishing, Chemical synthesis, automotive and bunkering If the above conditions for the development of biomethane as a programmable renewable sources in electricity generation will not happen (Low Case Scenario) the achievement of targets of reducing emissions and of the penetration of renewables would be entrusted mainly to the growth of solar and wind power for electricity generation with a predictable significant increase of costs for the system for the transmission and for the flexibility management, even due to the need to keep operating the back-up of combined cycle power plants. In this case the growth of gas demand in Italy would be more limited and equal in the decade to 0.8% annually, reaching to billion cubic meters. The contribution of biogas would be limited to a production of not more than 1.7 billion cubic meters, of which 0.9 billion as biofuel for transport. In the thermoelectric sector overall demand for gas and biomethane would see an increase of 2% over the decade, reaching by 2025, 25.5 billion cubic meters. The table below shows the breakdown of the expected annual consumption by market segment in this second case of greater development of the nonprogrammable renewable sources. 36 TEN-YEAR NETWORK DEVELOPMENT PLAN

37 TABLE 12B: NATURAL GAS AND BIOMETHANE DEMAND FORECAST IN ITALY Low case Scenario B 10.6 KWH/SCM RESIDENTIAL AND COMMERCIAL VAR. % AVERAGE ANNUAL CHANGE ,6 29,1 26,5 24,4 0,4% -0,8% POWER GENERATION 20,9 23,3 25,4 26,1 2,8% 2,0% INDUSTRY 14,0 14,6 14,4 13,9 1,0% 0,2% OTHER (*) 2,0 2,8 4,6 6,5 9,0% 9,0% VAR. % AVERAGE ANNUAL CHANGE CONSUMPTION AND LOSSES 2,0 2,3 2,4 2,4 2,8% 2,0% TOTAL DEMAND 67,4 72,0 73,2 73,3 1,6% 0,8% (*) Including consumptions for Agriculture and Fishing, Chemical synthesis, automotive and bunkering. In the face of the trend of expected annual demand, it is estimated that, even in perspective and independently from the annual demand scenarios considered, the daily demand will not have significant changes compared to historical highest values recorded until 2012 (historic record registered on 6 February 2012 amounted to 472 million cubic meters). In particular, in the low scenario, it is necessary to consider the back-up role of the gas thermal power generation related to the development of electricity generation from renewable sources. The detail about historical higest daily demand and higest power generation withdrawal (registered on ) are shown in table below. TABLE 13: DAILY MAXIMUM VALUES OF WITHDRAWAL FROM NATIONAL NETWORK M 10.6 KWH/SCM MAX POWER GENERATION DISTRIBUTION NETWORK 302,88 INDUSTIAL 46,43 POWER GENERATION 110,31 127,60 OTHER (*) 12,52 TOTAL 472,14 (*) Including delivery to other transportation grid and export Gas imports will continue to be the primary source of coverage in demand and will increase more significantly as consequence of the increasing role of Italian gas transit system, encouraged by the projects of infrastructure development of import and export network. It is estimated an increase of gas imports to cover only domestic needs of about 9 billion cubic meters in a decade, with an additional contribution of about 5 billion cubic meters after 2020 (increased up to 8 billion) for export to North (possible both at Passo Gries and Tarvisio). The expected increase in domestic gas production is due to the growth of biomethane, the contribution of which, as already mentioned, is estimated to be 5.8 billion cubic meters in The gas production from "conventional" fields TEN-YEAR NETWORK DEVELOPMENT PLAN 37

38 of national production, will see a reduction of its contribution on the decade (- 1.0% annual average over the period ). TABLE 14A: NATURAL GAS AND BIOMETHANE SUPPLY FORECAST IN ITALY Hight case scenario B 10.6 KWH/SCM VAR. % AVERAGE ANNUAL CHANGE IMPORT 60,8 65,7 74,6 75,7 1,9% 2,1% NATIONAL PRODUCTION 6,4 10,0 11,7 13,5 11,7% 6,2% EXPORT -0,3-1,1-5,1-5,1 41,6% 34,0% VAR. % AVERAGE ANNUAL CHANGE TOTAL AVAILABILITY (*) 67,0 74,6 81,2 84,1 2,7% 1,9% (*) not including stock variation TABLE 14B: NATURAL GAS AND BIOMETHANE SUPPLY FORECAST IN ITALY Low case Scenario B 10.6 KWH/SCM VAR. % AVERAGE ANNUAL CHANGE IMPORT 60,8 64,2 73,7 74,7 1,4% 1,9% NATIONAL PRODUCTION 6,4 8,8 7,6 6,7 8,1% 1,7% EXPORT -0,3-1,1-8,1-8,1 41,6% 40,3% VAR. % AVERAGE ANNUAL CHANGE TOTAL AVAILABILITY (*) 67,0 71,9 73,2 73,3 1,8% 0,9% (*) not including stock variation TRANSMISSION CAPACITY IN THE PERIOD Firm and interruptible transmission capacity at the beginning of the gas year , relative to the entry points interconnected with foreign countries and the LNG terminals, is equal to Mcm/day. At the entry points of Mazara del Vallo and Gela is made available a competing capacity of 6.7 million cubic meters / day in accordance with Chapter 5, Paragraph 3 of the Network Code. In addition to the entry capacity for interconnection points and LNG terminals, there are 31 million cubic meters/day of entry capacity for national production. This capacity can be modulated over two periods of the year, so that transmission capacity can be increased during the winter period. 38 TEN-YEAR NETWORK DEVELOPMENT PLAN

39 TABLE 15: IMPORT CAPACITY M SCM/DAY THERMAL YEAR TRANSPORT CAPACITY THERMAL YEAR TRANSPORT CAPACITY THERMAL YEAR TRANSPORT CAPACITY THERMAL YEAR TRANSPORT CAPACITY ENTRY POINT FIRM INTERRUPTIBLE TOTAL FIRM INTERRUPTIBLE TOTAL FIRM INTERRUPTIBLE TOTAL FIRM INTERRUPTIBLE TOTAL MAZARA DEL VALLO 99,0 6,0 105,0 99,0 6,2 105,2 96,6 8,6 105,2 89,2 9,3 98,5 GELA 31,6 6,0 37,6 31,6 6,2 37,8 29,2 8,6 37,8 28,5 9,3 37,8 COMPETING CAPACITY (*) 6,7 6,7 TOTAL SOUTH 130,6 12,0 142,6 130,6 12,4 143,0 125,8 17,2 143,0 124,4 18,6 143,0 PANIGAGLIA (GNL) 13,0 13,0 13,0 13,0 13,0 13,0 13,0 13,0 CAVARZERE (GNL) 26,4 26,4 26,4 26,4 26,4 26,4 26,4 26,4 LIVORNO (GNL) 15,0 15,0 15,0 15,0 15,0 15,0 TOTAL CENTRE 39,4 0,0 39,4 54,4 0,0 54,4 54,4 0,0 54,4 54,4 0,0 54,4 PASSO GRIES 59,0 5,4 64,4 59,0 5,4 64,4 59,0 5,4 64,4 59,0 5,4 64,4 TARVISIO 107,0 9,8 116,8 107,0 8,5 115,5 107,0 7,5 114,5 107,0 7,0 114,0 GORIZIA 2,0 2,8 4,8 2,0 2,8 4,8 2,0 2,8 4,8 2,0 2,8 4,8 TOTAL NORTH 168,0 18,0 186,0 168,0 16,7 184,7 168,0 15,7 183,7 168,0 15,2 183,2 TOTAL CAPACITY 338,0 30,0 368,0 353,0 29, ,2 32,9 381,1 346,8 33,8 380,6 (*) For the thermal year 2015/2016 is offered a Competing Capacity in the entry points of Mazara del Vallo and Gela in accordance with chapter 5 paragraph 3 of the Network. TRANSMISSION CAPACITY IN THE PERIOD Snam Rete Gas has prepared its long-term plan regarding the availability of transmission capacity, which highlights the capacities of each entry point interconnected with foreign pipelines and LNG terminal. It also includes exit capacity interconnected with foreign pipelines, amounting to 24 Mcm/day until 2017 and increasing to 46.3 Mcm/day by In particular, for the exit point at Passo Gries, current development projects will increase capacity to up to 40Mcm/day, available from The detail for firm import capacity is set out in the following table. TEN-YEAR NETWORK DEVELOPMENT PLAN 39

40 TABLE 16: IMPORT FIRM CAPACITY M SCM/DAY ENTRY POINT MAZARA DEL VALLO 84,2 79,3 79,3 79,3 71,6 71,6 71,6 79,2 79,2 79,2 79,2 79,2 GELA 23,2 18,0 18,0 18,0 11,0 11,0 11,0 17,3 17,3 17,3 17,3 17,3 COMPETING CAPACITY MAZARA AND GELA (*) 18,6 28,7 28,7 28,7 7,5 7,5 7,5 7,5 7,5 1ST SOUTH INITIATIVE 7,7 7,7 7,7 23,6 23,6 23,6 23,6 23,6 COMPETING CAPACITY SOUTH (**) 35,7 35,7 35,7 22,4 22,4 22,4 22,4 22,4 TOTAL SOUTH 126,0 126,0 126,0 126,0 126,0 126,0 126,0 150,0 150,0 150,0 150,0 150,0 GNL PANIGAGLIA 13,0 13,0 13,0 13,0 13,0 13,0 13,0 13,0 13,0 13,0 13,0 13,0 GNL CAVARZERE 26,4 26,4 26,4 26,4 26,4 26,4 26,4 26,4 26,4 26,4 26,4 26,4 GNL LIVORNO 15,0 15,0 15,0 15,0 15,0 15,0 15,0 15,0 15,0 15,0 15,0 15,0 TOTAL CENTRE 54,4 54,4 54,4 54,4 54,4 54,4 54,4 54,4 54,4 54,4 54,4 54,4 PASSO GRIES 59,0 59,0 59,0 59,0 59,0 59,0 59,0 59,0 59,0 59,0 59,0 59,0 TARVISIO 107,0 107,0 107,0 107,0 107,0 107,0 107,0 107,0 107,0 107,0 107,0 107,0 GORIZIA 2,0 2,0 2,0 2,0 2,0 2,0 2,0 2,0 2,0 2,0 2,0 2,0 TOTAL NORTH 168,0 168,0 168,0 168,0 168,0 168,0 168,0 168,0 168,0 168,0 168,0 168,0 TOTAL CAPACITY 348,4 348,4 348,4 348,4 348,4 348,4 348,4 372,4 372,4 372,4 372,4 372,4 (*) Competing Capacity in the entry points of Mazara del Vallo and Gela in accordance with chapter 5 paragraph 3 of the Network Code (**) Competing Capacity in the entry points of Mazara del Vallo, Gela and 1st South Initiative in accordance with chapter 5 paragraph 3 of the Network Code. The detail for export capacity is set out in the following table. TABLE 17: EXPORT CAPACITY M SCM/DAY EXIT POINT GORIZIA, BIZZARONE, SAN MARINO (FIRM CAPACITY)) PASSO GRIES (FIRM CAPACITY) TARVISIO (INTERRUPTIBLE CAPACITY)* COMPETING CAPACITY (FIRM CAPACITY)** NEW INTERCONNECTION WITH SLOVENIA (FIRM CAPACITY) 6,1 6,1 6,1 6,1 6,1 6,1 6,1 6,1 6,1 6,1 6,1 6,1 5,0 5,0 22,0 22,0 22,0 22,0 22,0 22,0 22,0 22,0 22,0 22,0 18,0 18,0 18,0 18,0 18,0 18,0 18,0 18,0 18,0 18,0 18,0 18,0 0,3 0,3 0,3 0,3 0,3 (*) Interruptible transportation capacity available with a physical inlet flow or a physical flow equal to zero at the entry point of Passo Gries (**) Transport capacity that can be booked at the entry points of Tarvisio and/or Passo Gries in accordance with the Network Code, Chapter 5, Paragraph 3 COVERAGE OF ANNUAL DEMAND The planned transmission capacities are adequate to meet the forecast demand and exports. Following the start of export at Passo Gries in 2018, export volumes of up to 5 billion cubic meters are expected by 2022 in the high case scenario. The following chart illustrates the forecast for transmission capacity and utilization rate over the period, in specific: total capacity is the aggregated technical firm capacity for all entry points interconnected with foreign pipelines and LNG plants, including new capacity; 40 TEN-YEAR NETWORK DEVELOPMENT PLAN

41 utilization rate is the ratio between import supply (including both domestic consumptions and export) and total capacity. FIGURE 5: ANNUAL COVERAGE TEN-YEAR NETWORK DEVELOPMENT PLAN 41

42 Gas infrastructure in Italy and in Europe

43 SNAM RETE GAS TRANSMISSION NETWORK Snam Rete Gas is the major natural gas transmission and delivery operator across Italy, owning almost all the gas transmission infrastructure in Italy, with over 32,500 km of pipelines in operation at high and medium pressure (representing approximately 93% of the entire transmission system). Snam Rete Gas manages the gas pipeline network through 8 district offices, 48 maintenance centers, 11 compressor stations (a total of 877 MW) and operates a Dispatching center which had its structure and technology renovated in The table below shows the installed length of the pipeline network for each calendar year prior to TABLE 18: SNAM RETE GAS TRANSPORT NETWORK LENGHT DATA EXPRESSED IN KM VAR. ASS VS 2014 NATIONAL GRID ,7% REGIONAL GRID ,5% TOTAL ,6% VAR. % 2015 VS 2014 The national transmission network owned by Snam Rete Gas comprises large diameter pipes that transport gas from the entry points of the system (import gas pipelines, LNG regasification plants and the major domestic production centers) to regional transmission network interconnection points and to gas storage facilities. During 2015, the development of pipeline variants to existing infrastructure and new pipelines have increased the extent of the national network of 71 km, net of eliminated pipelines. The Snam Rete Gas regional transmission network transports natural gas on an inter-regional, regional and local scale to industrial users, power stations and urban distribution networks. Snam Rete Gas s interconnections within the transmission network in Italy are guaranteed by 20 connection and switching points (the so called nodes ) that connect the Snam Rete Gas transmission network with other Italian network operators, and 569 pressure reduction and adjustment stations. These stations regulate the gas flow within the network and ensure continued supply to connected systems operating at different pressures. TEN-YEAR NETWORK DEVELOPMENT PLAN 43

44 FIGURE 6: SNAM RETE GAS - NETWORK INFRASTRUCTURE FIGURE 6: SNAM RETE GAS - NETWORK INFRASTRUCTURE The transmission infrastructure includes four coastal terminals that connect the The transmission infrastructure includes four coastal terminals that connect the subsea pipelines to the onshore pipelines in Mazara del Vallo (Trapani), Messina, subsea pipelines to the onshore pipelines in Mazara del Vallo (Trapani), Messina, Favazzina (Reggio Calabria) and Palmi (Reggio Calabria). Favazzina (Reggio Calabria) and Palmi (Reggio Calabria). NATIONAL TRANSMISSION NETWORK NATIONAL TRANSMISSION NETWORK At the end of 2015, Snam Rete Gas s national transmission network is 9,630 km At the end of 2015, Snam Rete Gas s national transmission network is 9,630 km long. The pipelines include both onshore pipelines, whose maximum diameter long. The pipelines include both onshore pipelines, whose maximum diameter reaches 1,400 mm and transport gas at a pressure between 24 and 75 bar, and reaches 1,400 mm and transport gas at a pressure between 24 and 75 bar, and subsea pipelines that cross the Messina Strait with a diameter of between 500 subsea pipelines that cross the Messina Strait with a diameter of between 500 and 600 mm and operate at pressures of up to 115 bar. and 600 mm and operate at pressures of up to 115 bar. Another subsea pipeline of 800 mm diameter operating at pressures up to 84 Another subsea pipeline of 800 mm diameter operating at pressures up to 84 bar connects the network to the offshore LNG Tuscany terminal (OLT) in bar connects the network to the offshore LNG Tuscany terminal (OLT) in Livorno. Livorno. 44 TEN-YEAR NETWORK DEVELOPMENT PLAN

45 The main lines of the national network interconnected to the import pipelines include: Mazara del Vallo - Minerbio: two lines (in certain places three lines, DN1050-DN1200) that connect Mazara del Vallo (Trapani) to Minerbio (Bologna), each approximately 1,500 km long. The network connects Mazara del Vallo to the Trans-Mediterranean sealines, which interconnect Tunisia to Italy through the Sicily channel, and form part of the import infrastructure for importing gas originating in Algeria. Gela - Enna: a 67 km long line (DN900) that connects the landing point of the Greenstream pipeline which allows imports from Libya, Gela (Caltanissetta), to the national transmission network. Tarvisio (Udine) Sergnano (Cremona): three lines with a length of approximately 900 km (DN850 DN1400) that connect the Italian system to the Austrian TAG gas pipeline, crossing the Po Valley, and continuing to Sergnano (Cremona). A new 1400 mm pipeline of 170 km (partially completed) is under construction and it will replace the existing 850/750 mm section between Zimella (Verona) and Cervignano (Lodi). Gorizia Flaibano: a line (in certain stretches two lines) with a length of approximately 65 km (DN650 DN1050) that connects the Slovenian transmission network at Gorizia with the national network in Flaibano on the Tarvisio import route. Passo Gries Mortara: a 177 km line (DN1200) that connects the Swiss transmission system at Passo Gries (Verbania) the entry point interconnected with the Transitgas gas pipeline to themortara (Pavia) node in the Po Valley. In addition, the Snam Rete Gas national network is connected to the following LNG plants: GNL Italia in Panigaglia (La Spezia): this is connected to the national network near Parma through a 110 km section. Adriatic LNG in Porto Viro (Rovigo): this connects the national network at the Minerbio node through the Cavarzere (Venezia) Minerbio pipeline owned by Infrastrutture Trasporto Gas S.p.A. OLT in Livorno: a 36 km connection to the national network, of which 28 km is underwater. REGIONAL TRANSMISSION NETWORK The regional transmission network is 22,904 km long and it comprises gas pipelines with a diameter and operating pressures that are typically lower to those of the national network. It has the purpose of moving natural gas on an inter-regional, regional and local scale to supply gas to industrial users and distribution companies. TEN-YEAR NETWORK DEVELOPMENT PLAN 45

46 COMPRESSION PLANTS Snam Rete Gas makes use of eleven compression stations to increase the gas pressure in pipelines and restore pressures to ensure flow. The plants are located within the national network and generally include several spare units, each consisting of gas turbines and centrifugal compressors. These systems give the natural gas the energy ( in the form of pressure - prevalence ) to be transportated in the national pipeline network. As of December 31, 2015, the installed power amounted to 877 MW. FIGURE 7: SNAM RETE GAS COMPRESSION PLANTS CRITICAL ISSUES AND NETWORK CONGESTION Today the transport network has a good degree of flexibility and of interconnection which guarantees the operation also in case of stress conditions. Some particular situations are taken into account in the evaluation of the network status and to evaluate the need for any intervention. On the national transport network is considered a scenario in which the entry point of Passo Gries, because of events independent by Snam Rete Gas, may have an inflow of 46 TEN-YEAR NETWORK DEVELOPMENT PLAN

47 zero (as for both commercial or technical factors, already occurred in the past) zero (as for both commercial or technical factors, already occurred in the past) together with an availability of storage gas devices of north-western area which together with an availability of storage gas devices of north-western area which could be limited, producing a lack of the contribution from this source. With the could be limited, producing a lack of the contribution from this source. With the facilities today available, in this particular condition, could be difficult to ensure facilities today available, in this particular condition, could be difficult to ensure the northwestern Italy's market coverage in a climatic context of normal winter. the northwestern Italy's market coverage in a climatic context of normal winter. The project "Support to the north-west market and bidirectional cross-border The project "Support to the north-west market and bidirectional cross-border flows" which will be described in the document, was designed to reduce and flows" which will be described in the document, was designed to reduce and eliminate this condition. eliminate this condition. Snam Rete Gas has also taken into account some transport situations on the Snam Rete Gas has also taken into account some transport situations on the regional network for which it is necessary to: regional network for which it is necessary to: 1. create new transport capacity in order to sustain increases in demand for 1. create new transport capacity in order to sustain increases in demand for natural gas, registered in a given area over the medium - long term; natural gas, registered in a given area over the medium - long term; 2. strengthen (and / or extend, in the case of a new catchment area) the 2. strengthen (and / or extend, in the case of a new catchment area) the network following the implementation of new delivery points, or new points of network following the implementation of new delivery points, or new points of interconnection with other transport networks. interconnection with other transport networks. The resulting enhancement interventions are localized and involve areas of The resulting enhancement interventions are localized and involve areas of limited geographical extent. limited geographical extent. CURRENT NATIONAL PRODUCTION AND EXPECTED DEVELOPMENTS CURRENT NATIONAL PRODUCTION AND EXPECTED DEVELOPMENTS In 2014 there was a production of 7.28 billion cubic meters, with a decrease of 6 In 2014 there was a production of 7.28 billion cubic meters, with a decrease of 6 % compared to the 2013 production (7.71 billion Sm3 ). This confirms the % compared to the 2013 production (7.71 billion Sm3 ). This confirms the downward trend that occurred in The 77% of the national production downward trend that occurred in The 77% of the national production comes from offshore fields and the remainder from onshore fields. comes from offshore fields and the remainder from onshore fields. National gas is fed into the national grid in 54 entry points. National gas is fed into the national grid in 54 entry points. FIGURE 8: METHANE NATIONAL PRODUCTION (B Scm) FIGURE 8: METHANE NATIONAL PRODUCTION (B Scm) Proved reserves estimated by the Directorate General for the mineral and Proved reserves estimated by the Directorate General for the mineral and energy resource are around 54 billion cubic meters, 55% of which is in offshore energy resource are around 54 billion cubic meters, 55% of which is in offshore fields. fields. There are also probable and possible reserves, for about 84 billion cubic meters. There are also probable and possible reserves, for about 84 billion cubic meters. On the basis of only proved reserves, Italy ranks seventh in Europe for gas On the basis of only proved reserves, Italy ranks seventh in Europe for gas reserves, highlighting an important potential for the development of internal reserves, highlighting an important potential for the development of internal resources also for the increase of security of supply. resources also for the increase of security of supply. The data on reserves at 31 December 2014 reveals, compared with the figure set The data on reserves at 31 December 2014 reveals, compared with the figure set at 31 December 2013 and net production obtained in the year 2014, an increase at 31 December 2013 and net production obtained in the year 2014, an increase TEN-YEAR NETWORK DEVELOPMENT PLAN 47

48 of probable reserves of about 3,7 billion cubic meters(+4.6%) in front of a of probable reserves of about 3,7 billion cubic meters(+4.6%) in front of a reduction of approximately 2.4 billion cubic meters (-4.3%). In 2014, the reduction of approximately 2.4 billion cubic meters (-4.3%). In 2014, the number of new drilling has reduced, in line with the trend of the last decade, and number of new drilling has reduced, in line with the trend of the last decade, and there has been a progressive reduction of the research of new deposits. This there has been a progressive reduction of the research of new deposits. This trend shows that the activity of the operators, actually, is almost exclusively trend shows that the activity of the operators, actually, is almost exclusively oriented to optimize the development of existing fields, rather than to research oriented to optimize the development of existing fields, rather than to research and develop new resources. No hydrocarbons discovery was in fact carried out in and develop new resources. No hydrocarbons discovery was in fact carried out in the year the year Given this situation and the availability of reserves, are ongoing assessments of Given this situation and the availability of reserves, are ongoing assessments of regulatory measures that allow a resumption of mining in the national territory. regulatory measures that allow a resumption of mining in the national territory. FIGURE 9: RESERVES AS OF DECEMBER 31, 2014 (B Scm) FIGURE 9: RESERVES AS OF DECEMBER 31, 2014 (B Scm) EXISTING STORAGE SITES AND EXPECTED DEVELOPMENTS EXISTING STORAGE SITES AND EXPECTED DEVELOPMENTS In Italy, there are ten operational depleted field storage facilities. They are In Italy, there are ten operational depleted field storage facilities. They are located in the regions of Lombardy, Emilia Romagna, Veneto and Abruzzo. located in the regions of Lombardy, Emilia Romagna, Veneto and Abruzzo. The available storage capacity at the end of 2015 amounted to 16 billion cubic The available storage capacity at the end of 2015 amounted to 16 billion cubic meters; this amount includes 4.6 billion cubic meters of strategic reserve - a meters; this amount includes 4.6 billion cubic meters of strategic reserve - a value is calculated by MiSE - to mitigate gas shortage emergencies. value is calculated by MiSE - to mitigate gas shortage emergencies. Gas storage plays an important role in the Italian market, as it provides both the Gas storage plays an important role in the Italian market, as it provides both the major source of flexibility, and increases security of supply in a market that is major source of flexibility, and increases security of supply in a market that is heavily dependent on imports. heavily dependent on imports. The need to develop storage capacity was highlighted in the SEN, which The need to develop storage capacity was highlighted in the SEN, which indicated the need to increase the capacity margin of the system as well as indicated the need to increase the capacity margin of the system as well as increasing flexibility in gas supply to prevent emergency situations during peak increasing flexibility in gas supply to prevent emergency situations during peak demand conditions and/or supply interruption. Increases in storage capacity are demand conditions and/or supply interruption. Increases in storage capacity are expected because of the expansions of the existing storage facilities in Fiume expected because of the expansions of the existing storage facilities in Fiume Treste, Minerbio, Ripalta, Sabbioncello, Sergnano and Settala. In addition is Treste, Minerbio, Ripalta, Sabbioncello, Sergnano and Settala. In addition is expected the commissioning of new sites under construction or authorization: expected the commissioning of new sites under construction or authorization: Bordolano, in Lombardy, developed by Stogit (commissioned in February Bordolano, in Lombardy, developed by Stogit (commissioned in February 2016); 2016); San Potito and Cotignola, in Emilia Romagna, owned by Edison Stoccaggio San Potito and Cotignola, in Emilia Romagna, owned by Edison Stoccaggio in the activation phase (connection with the national network already in the activation phase (connection with the national network already realized); realized); Palazzo Moroni in Marche, on initiative of Edison Storage; Palazzo Moroni in Marche, on initiative of Edison Storage; Cornegliano in Lombardy, on the initiative of Italgas Storage. Cornegliano in Lombardy, on the initiative of Italgas Storage. 48 TEN-YEAR NETWORK DEVELOPMENT PLAN

49 EXISTING LNG TERMINALS AND EXPECTED DEVELOPMENTS Italy has three LNG terminals connected to the national network: the GNL Italia terminal in Panigaglia, with a capacity of 3.5 billion cubic meters/year; the Adriatic LNG offshore terminal in Rovigo, with a capacity of 8 billion cubic meters/year the infrastructure is owned by ExxonMobil (70,7%), Qatar Terminal (22%) and Edison (7,3%). Edison holds 80% of the access rights on the basis of a third-party access exemption which has been granted for a period of 25 years; the OLT offshore terminal in Livorno, with a capacity of 3.75 billion cubic meters / year, which has started businesses activities in mid-december Moreover, the SEN identifies the construction of new regasification capacity as a fundamental task that contributes to supply diversification and to a more liquid and competitive gas market. MiSE has already authorized the construction of other three LNG terminals: an LNG terminal in Falconara Marittima, owned by Api Nòva Energia, with a capacity of 4 billion cubic meters; an LNG terminal in Gioia Tauro, owned by MedGas LNG Terminal, with a capacity of 12 billion cubic meters/year; and an LNG terminal in Porto Empedocle, owned by Nuove Energie, with a capacity of 8 billion cubic meters/year (the latter has also received authorization from the Sicily Region). Another project of a new terminal that have been considered in ENTSOG s TYNDP is Zaule, proposed by Gas Natural, with a capacity of 8 billion cubic meters. EUROPEAN PRIORITIES CONCERNING ENERGY INFRASTRUCTURE The 2013/347/EU regulation of the European Parliament and Council dated April 17, 2013 contains new guidelines for trans-european energy infrastructure. This document is intended to facilitate the development and interoperability of energy networks between the Member States in order to achieve the European objectives of competitiveness, sustainability and security of supplies. The regulation define high priority "corridors" of the electricity transmission, gas pipelines and oil pipelines, and place certain obligations on Member States in relation to PICs. 1. South-North interconnection in Western Europe ("NSI West Gas"): this route facilitates the transport of gas between Northern and Southern Europe, diversifying supply sources and increasing the availability of gas in the short term. 2. South-North interconnection in Central and Eastern Europe and Southern- Eastern Europe ("NSI East Gas"): this corridor facilitates regional interconnections and market integration between the Baltic, Adriatic and Aegean Seas, the eastern Mediterranean Sea and the Black Sea, increasing TEN-YEAR NETWORK DEVELOPMENT PLAN 49

50 diversification and security of the supply. 3. South Corridor ("Southern Gas Corridor - SGC"): it relates to an infrastructure of gas import originating from the Caspian Sea basin, Central Asia, Middle East and the Eastern Mediterranean basin towards Europe to increase the diversity of European gas supplies. 4. Baltic Energy Market Interconnection Plan ("BEMIP Gas"): the objective of which is to reduce the isolation of the three Baltic States and Finland and their dependence on a single supplier (Russia); in addition it will strengthen internal infrastructure, and increase the diversity and security of supply in the Baltic region. FIGURE 10: EUROPEAN PRIORITIES FOR NATURAL GAS INFRASTRUCTURE (Source: Snam from European commission) The 2013/347/EU regulation created a regional cooperation group for each of the above identified corridors. These groups are intended to ensure a cooperation among the Member States, regulatory national authorities, project promoters and other relevant parties in order to foster a broad agreement on the common infrastructure and facilitate the realization. Italy is involved in three regional groups: NSI West Gas, NSI East Gas and SGC. The main project of the North-South corridor concerns the construction of an interconnection from Italy, through Switzerland, France and Germany, to Eynatten in Belgium, and in turn to the Zeebrugge Hub. The initiative includes the implementation of physical reverse flow in order to improve the overall interconnection of the European gas network. Snam Rete Gas has already started the Italian projects that, combined with the counterpart 50 TEN-YEAR NETWORK DEVELOPMENT PLAN

51 projects in Switzerland, will create reverse flow capacity at Passo Gries, which will be effective from Snam Rete Gas is also ready to start the necessary network upgrades that will facilitate new capacity in GALSI (gas pipeline between Algeria and Italy via Sardinia) whenever it is built. This infrastructure pertains to the North South corridor. As part of the SGC, which is part also of the North-South corridor, the plan calls for further development of the Snam Rete Gas transmission network, including upgrades which will allow development of new entry points located in the Southern Italy (i.e. the Adriatica Line). In particular SGC includes two projects which are promoted by third parties. These projects are intended to allow the import of natural gas to Italy from the Caspian Sea, and potential additional production basins in the eastern Mediterranean Sea and the Middle East. The Trans-Adriatic Pipeline (TAP), which is designed to bring the gas from Azerbaijan to Italy via Greece and Albania, and the Poseidon pipeline - which would also connect Italy to Greece - are considered of great importance.in line with the planned construction of new infrastructure that could reach Southern Italy, Snam Rete Gas has planned various projects that will allow Italy to receive additional quantities of natural gas from a hypothetical future southern entry point, for example, a new sealine or a new regasification terminal. Snam Rete Gas also has already increased (in 2011) capacity for bidirectional transmission at the interconnection point of Tarvisio, which is also of interest to the SGC. PROJECTS OF COMMON INTEREST A Project of Common Interest (PCI) is defined as a project that could provide significant improvements in at least two Member States, contributing to market integration, expansion of competition, security of supply and the reduction of CO2 emissions. PCI are accompanied by a priority status at the national level, which requires Member States to expedite authorization procedures, and enable the project to obtain an improved regulatory treatment. These projects also allow access to European funding (5.85 billion euros for the period were allocated). On 18 November 2015, the European Commission presented a list of 195 PCI in the oil, gas and electricity sectors, which is the second list after the one adopted in October Concerning PCI confirmed in the second list involving Italy and adopted by the Commission, Snam Rete Gas is the proponent for two projects, "Support to market the North West and bidirectional cross-border flows" and "Development for new imports from the South", described in detail in the following chapter of this document. Other PCI projects of gas sector with a direct impact to the Italian system, shown in the following table, are in various stages of development. At the time of the adoption of the first list of the PIC the final TEN-YEAR NETWORK DEVELOPMENT PLAN 51

52 investment decision was only taken for the TAP pipeline. TABLE 19: PROJECTS OF COMMON INTEREST CONCERNING ITALY (Source: European Commission) PCI MALTA CONNECTION TO THE EUROPEAN GAS NETWORK (GAS PIPELINE BETWEEN ITALY (GELA) AND FLOATING STORAGE AND REGASIFICATION UNIT (FSRU)) GAS PIPELINE CONNECTING ALGERIA AND ITALY (SARDINIA) [CURRENTLY KNOWN AS THE GALSI PIPELINE] GAS PIPELINE CONNECTING GREECE TO ITALY THROUGH ALBANIA AND ADRIATIC SEA [KNOWN AS TRANS-ADRIATIC PIPELINE (TAP)] GAS PIPELINE CONNECTING GREECE TO ITALIA [KNOWN AS "POSEIDON PIPELINE"] CORRIDOR PCI REFERENCE NSI WEST GAS NSI WEST GAS SGC SGC ENTSOG TEN-YEAR NETWORK DEVELOPMENT PLAN Regulation 2009/715/EC of the European Parliament and Council dated July 13, 2009 requires ENTSOG to publish, every two years, a Ten Year Network Development Plan (TYNDP) based on the national development plans. The document must also take into account the regional development plans and what is now the Projects of Common Interest, which have to be part of the plan. The TYNDP s main objective is to provide an overview of existing and planned gas infrastructure at European level and to highlight any gaps in the future investments, in relation to the expected development of supply and demand at European level. The publication of TYNDP by ENTSOG is followed by a process of public consultation for three months. After consultation, ENTSOG processes the comments and formally submits the TYNDP to the Agency for the Cooperation of Energy Regulators (ACER), which must express its opinion. The process for the elaboration of TYNDP 2015 was launched in July 2014 and it was published in the month of March Moreover, from this edition, the TYNDP includes specific considerations related to the impacts of infrastructure included in the first list of PCI. The document includes a cost-benefit analysis of the european energy system carried by the methodology developed by ENTSOG and approved by the Commission with the Article 11 of Regulation 347/2013. The analisys is based on the use of the Network Modelling tool (the "NeMo tool ), which is used to assess the contribution of the projects to achieving the objectives of supply security, increased competitiveness and market integration. The NeMo tool identifies potential gaps in the development of the European transmission network, areas that depend on a single supply source, and the diversity of supply. Project evaluation takes place in different scenarios of market evolution and infrastructure development. The supply and demand scenarios in the TYNDP are based on the projections of individual TSOs, validated through comparison with ENTSOG s own forecasts and other recognized sources. As previously mentioned, the ten-year plan of Snam Rete Gas is consistent with the TYNDP, and it considers planned developments of the interconnections 52 TEN-YEAR NETWORK DEVELOPMENT PLAN

53 within the European network. STRATEGIC PLAN OF EUROPEAN INVESTMENTS The European Commission, in close cooperation with BEI (European Investment Bank) has initiated the development of the strategic plan for investment in Europe, with the purpose to stimulate the growth and the creation of new jobs by attracting new investments. Among the strategic sectors identified also appears the energy (in addition to transport, broadband, education, research and innovation). Activities for project collection are ongoing and it will start a selection process. In this context, Snam Rete Gas has put forward to the competent authorities the request for the inclusion of some initiatives such as project Support to the North West market and bidirectional cross-border flows and the project Development for new import from South. TEN-YEAR NETWORK DEVELOPMENT PLAN 53

54 Transmission network ten year development plan

55 DEVELOPMENT PLAN Snam Rete Gas has drawn up a development plan for its transmission network which shows the main transport infrastructures to build up or reinforce in the timesheet of the plan and that meets the needs of future supply and demand, security of supply for Italy, and facilitates both European market integration, and the development of liquidity in the Italian gas market. The plan is consistent with the developments within the European Union, including PCI and the investments identified by ENTSOG in the TYNDP *. The most significant projects of the ten-year plan are the implementation of "Support to the North West market and bidirectional cross-border flows and the implementation of the "Adriatica line". The first is mainly aimed at the flexibility and security of supply of the market in the North West of the country and the creation of export capacity at the interconnection points of Passo Gries and Tarvisio, the second will allow new imports from Southern Italy and facilitates the expansion of the Fiume Treste storage facility. The main regional network projects are also highlighted, including the projects for the extension of natural gas network in some areas of Southern Italy. The complete list of the projects contained in the plan is attached in the last part of the document (annex 5). * The plan forecasts development project for the transport network aimed to create new entry point from the South and to develop the north east network. These projects are functional to new supply sources via pipeline or LNG plant. In order to facilitate the identification of the conformity of projects, the document lists the identification codes assigned by ENTSOG in its TYNDP to individual projects. DESIGN CRITERIA AND ENVIRONMENT PROTECTION Snam Rete Gas project the new infrastructures on the base of current law and operating the technical best practice that takes into account the city planning and the environmental constraint. In particular the studies for pipelines layout are developed with the aim of reducing at minimum the environmental impact in order to avoid the most sensible areas such as national park, protected areas and Natura 2000 sites, and areas with archeological interest. Hidrogeological unstable areas and highly urbanized areas are avoided due to safety reasons. The pipelines design evaluates different alternatives and develops the best one in terms of environmental sustainability. For the project subjected to regional or national Environmental Impact Assessment, the existing law, the Legislative Decree 152/2006 requires that the environmental impact study must contain the description of the principals alternatives token into account by the promoter including the so-called zero option whit the indication of the reasons of the choice. During the authorization phases minimal variation to the project can be studied in order to satisfy particular needs of the local Authority. The project exposed in the plan represent the synthesis of the analysis carry out in order to minimize the environmental impact and represent the best design solution. TEN-YEAR NETWORK DEVELOPMENT PLAN 55

56 NATIONAL NETWORK DEVELOPMENT PROJECTS The national network consists of large diameter pipelines and related auxiliary plants to transmit the gas from the entry points of the system (importation points and domestic production facility), to the exit points which supply gas to the regional networks and to storage facilities. The national network projects included in the plan are required to expand the infrastructure to allow for new import and export capacity, as shown in Figure 11. The Plan includes development projects on the national network that will lead to the creation of over 730 km of new pipelines and approximately 120 MW of new compressor units. In the last part of the document the purpose and characteristics of the most significant works are described. The plan includes projects which expand the transmission network from the entry points in Southern Italy (of which some stretches are already under construction), and feasibility activities for other works to enhance the network, including the lines from the South and from the North-East. The projects are intended for possible new international supply sources arriving via both pipeline and LNG terminals. Construction of these projects is still subject to the acceptance of the contractual commitments for use of the transmission capacity, pursuant to the access procedures of the Network Code of Snam Rete Gas. Apart from the specific connections to the network, the projects included in the ten-year plan are not necessarily linked to specific import projects. Projects in progress are designed to expand the general capacity of the network to transport gas from the South and from the North-East. In order to understand the value of proposed projects, and in order to establish the volumes of new transmission capacity that the projects provide, Snam Rete Gas examines a range of daily market scenarios taking into account forecast of supply and demand over the ten-year period as well as the specific import projects contemplated. For new importation capacity, it is necessary to examine the impact within the summer season (see Annex 2) where consumption is lower, as conservative project condition. This approach allows Snam Rete Gas to ensure that the sizing of projects is appropriate, and preserving the generality of their objectives. Another important element of Snam Rete Gas s development plan is the implementation of the bidirectional capacity toward Switzerland, at Passo Gries, for which the construction works have already commenced to expand the transmission in the Po Valley. It should also be noted that the export capacity of the interconnection point between Italy and Austria, in Tarvisio, was expanded in TEN-YEAR NETWORK DEVELOPMENT PLAN

57 FIGURE 11: MAIN DEVELOPMENT PROJECTS ON THE NATIONAL NETWORK TABLE 20: DEVELOPMENT PROJECTS FOR THE PERIOD PROJECT NAME SUPPORT TO THE NORTH WEST MARKET AND BIDIRECTIONAL CROSS-BORDER FLOWS EXPECTED AVAILABILITY OF CAPACITY 2018 YES FINAL INVESTMENT DECISION TABLE 21: DEVELOPMENT PROJECTS FOR THE PERIOD PROJECT NAME DEVELOPMENT FOR NEW IMPORTS FROM THE SOUTH ("ADRIATICA LINE") EXPECTED AVAILABILITY OF CAPACITY 2023 NO INTERCONNECTION WITH SLOVENIA 2023 NO IMPORT DEVELOPMENTS FROM NORTH-EAST TO BE DEFINED NO ADDITIONAL SOUTHERN DEVELOPMENTS TO BE DEFINED NO GALSI PROJECT TO BE DEFINED NO FINAL INVESTMENT DECISION The following paragraphs describe the purposes and reasons for each project and the related main technical considerations and timing. TEN-YEAR NETWORK DEVELOPMENT PLAN 57

58 SUPPORT TO THE NORTH-WEST MARKET AND BIDIRECTIONAL CROSS-BORDER FLOWS In 2015 has been finalised the first phase of the project to support to the North West market and bidirectional cross-border flows, which allows the creation of an initial availability of flows for export from October The completion of this phase ensure exports of 5 MSm3/d at Passo Gries, and up to 18 MSm3/d at Tarvisio. The second phase, continues on from the first phase and integrates the expansions to facilitate an increase in export capacity by The capacity at the exit point of Passo Gries will increase to up to 40 MSm3/d, or up to 22 MSm3/d with a simultaneous exit flow at the Tarvisio exit point of up to 18 MSm3/d. In addition to facilitating forecast supplies for the Italian and European markets, Snam Rete Gas has planned the reverse flow capabilities so as to provide a greater degree of support for Austria and Switzerland in the event of an emergency supply shortage, as required by the EU Regulation 994/2010 issued by the European Parliament and Council dated October 20, 2010, acknowledged at the Italian level by Legislative Decree No. 93 dated June 1, SUPPORT TO THE NORTH WEST MARKET The first phase, ended in 2015, consists in expanding the capacity of the line from East to West of the Po Valley, through the construction of pipelines in Cremona - Sergnano (50 km - DN1200), Poggio Renatico - Cremona (149 km - DN1200) and Zimella - Cervignano (172 km - DN1400) as well as a new node in Sergnano and Minerbio. It also includes upgrades to the compressor plants at Istrana and Masera, as well as work on the measurement equipment at Masera, which enables management of the exit flows at Passo Gries and Tarvisio. Some of the works included in the project have already been completed. The Cremona - Sergnano pipeline and the upgrading of the compression plant in Istrana have been in operation since the end of The work on the compressors and measurement equipment at Masera were commissioned in July 2013, and the Poggio Renatico - Cremona pipeline was commissioned in October The construction of new pipelines also allows the replacement of the existing pipelines: Minerbio - Cremona, Cremona - Sergnano, Zimella - Sergnano and Sergnano - Cervignano, for a total extension of approximately 315 km, which improves the overall transmission system and reduces potential impacts in the urbanized area of Emilia, Veneto and Lombardy. The construction of the Cremona- Sergnano pipeline will also connect the new storage field of Bordolano to the national network. The project "Support to the North West market" is included in ENTSOG TYNDP with the identification code TRA-F TEN-YEAR NETWORK DEVELOPMENT PLAN

59 FIGURE 12: SUPPORT TO THE NORTH WEST MARKET SUPPORT TO THE NORTH WEST MARKET AND BIDIRECTIONAL CROSS-BORDER FLOWS The second phase is scheduled for commissioning at September 2018, and it involves the construction of pipelines between Cervignano - Mortara (62 km - DN1400) and Minerbio Poggio Renatico (19 km - DN1200 operative from December 2015), as well as new compression plants in Minerbio (24 MW) and Sergnano (45 MW) and the expansion of the existing compression plant in Poggio Renatico (+25 MW). The project "Support to the North West market and bidirectional cross-border flows" is included in ENTSOG TYNDP with the identification code TRA-F-214. FIGURE 13: SUPPORT TO THE NORTH WEST MARKET AND BIDIRECTIONAL CROSS- BORDER FLOWS TEN-YEAR NETWORK DEVELOPMENT PLAN 59

60 INTERCONNECTION WITH SLOVENIA In line with the expected increase in gas consumption in the area of Koper, taking into account the objectives of the European Directive No. 2009/73/EC and existing local infrastructure, the Italian MiSE and the Slovenian Ministry of Infrastructure agreed to build a new interconnection pipeline between the networks of Snam Rete Gas and Plinovodi (the Company managing the Slovenian transmission system) in the area of San Dorligo della Valle Osp and to support the participation of both companies in the development of a coordinated interconnection project. Snam Rete Gas and Plinovodi have defined a technical agreement that establishes the main technical elements of the project, such as the transmission capacity, taking into account the sizing of the pipeline, the minimum contractual pressure at the interconnection point and the maximum operating pressure. Under the agreement, the project foresees new capacity at the new exit point of the national network of San Dorligo della Valle amounting to about 0.3 MSm3/d. This project is still awaiting a final investment decision and commissioning is currently planned for As part of a coordinated project, in the month of November 2014 Snam Rete Gas and Plinovodi have launched a market test in order to collect the nonbinding expressions of interest from operators / users interested in the realization of exit capacity on the Snam Rete Gas network and entry capacity on the Plinovodi network at the new interconnection point. The period for submission of expressions of interest was completed in December 2014; the final investment decision is subject to the beginning and results of the booking process of transport capacity at the point. The project "Interconnection with Slovenia" is included in ENTSOG TYNDP with the identification code TRA-N-354. FIGURE 14: INTERCONNECTION WITH SLOVENIA 60 TEN-YEAR NETWORK DEVELOPMENT PLAN

61 DEVELOPMENT FOR NEW IMPORTS FROM THE SOUTH ("ADRIATIC LINE") Snam Rete Gas, in line with the findings of SEN, considers the development of new imports from the South of Italy a strategic element to enable a greater diversification of energy sources, so as to increase the competitiveness of the gas market and provide greater security to the entire national transmission system. Snam Rete Gas has therefore planned the construction of a project that will create new transmission capacity of approximately 24 MSm3/d to facilitate gas from future entry points in the South of the country. The project "Development for new imports from the South ("Adriatica Line")" is included in ENTSOG TYNDP with the identification code TRA-N-007. FIGURE 15: DEVELOPMENT FOR NEW IMPORTS FROM THE SOUTH The project includes the construction of an approximately 430 km long new pipeline (DN1200) and a compression plant of approximately 33 MW, along the South Nord line, known as the Adriatica Line". The Adriatica Line is functional to transport quantities of gas from any new sourcing initiatives from Sicily and from the middle Adriatic. TEN-YEAR NETWORK DEVELOPMENT PLAN 61

62 The Adriatica Line can be seen as a development that has the character of generality and allows to set up the system of gas supply to new Italian imports from the south. The upgrade works required for the transport of new quantities of gas are currently under feasibility study. In addition, the construction of the compressor station of Sulmona has been approved to improve the reliability and safety of the transport and also in relation to the expected increase in withdrawal capacity planned for the Stogit storage field of Fiume Treste. The Adriatica Line is included in the list of PCI presented on November, 18, 2015 by the European Commission. Snam Rete Gas, in accordance with the Directive 2009/73/EC dated July 13, 2009, has included this project within its plan and it understands its importance within Europe. The commissioning of the entire project is scheduled for the year IMPORT DEVELOPMENTS FROM NORTH-EAST The project involves the realization of new pipelines to increase the transmission capacity from North-East, and the connection of a regasification terminal in the northern Adriatic region. A final investment decision has not yet been taken. The project "Import developments from North-East" is included in ENTSOG TYNDP with the identification code TRA-N-008. FIGURE 16: IMPORT DEVELOPMENTS FROM NORTH-EAST 62 TEN-YEAR NETWORK DEVELOPMENT PLAN

63 ADDITIONAL SOUTHERN DEVELOPMENTS FIGURE 17: ADDITIONAL SOUTHERN DEVELOPMENTS The plan also contains a not- project to expand the South North transmission route, which includes a series of pipelines and related plant. The project would create additional transmission capacity to facilitate gas from a possible second new entry point in the South. Considering the need for works to revamp the compression station of Enna, the construction activities for the expansion of the plant itself, functional to new inflows from the south, have already begun. The project "Additional Southern developments" is included in ENTSOG TYNDP with the identification code TRA-N-009. TEN-YEAR NETWORK DEVELOPMENT PLAN 63

64 FIGURE 18: ADDITIONAL EXPANSIONS IN SICILY GALSI PROJECT FIGURE 19: GALSI PROJECT The GALSI project includes the installation of new onshore pipelines with a total length of 350 km, an offshore pipeline of 275 km and the construction of a compressor plant in Olbia. The project ensures new transmission capacity at the entry point of Porto Botte in Sardinia of 24 MSm3/d. The construction of a new gas pipeline connecting Algeria to Italy is shown in the PCIs list, but at the moment there is no information about the development 64 TEN-YEAR NETWORK DEVELOPMENT PLAN

65 of the project by the sponsoring companies. The project "GALSI" is included in ENTSOG TYNDP with the identification code TRA-N-012. OTHER PROJECT CONCERNING THE NATIONAL NETWORK Among other project concerning the national network, there is the TAP interconnection project (DN km), usefull for the possible new infrastructure of import TAP connected near Melendugno to the existing national network in the area of Brindisi. FIGURE 20: TAP INTERCONNECTION OTHER PROJECTS OF COMMON INTEREST CONCERNING NATIONAL NETWORK The projects planned by Snam Rete Gas in the ten-year period take into account the developments included in the list of PCI, submitted on November 18, 2015 by the European Commission. With reference to the PCI project related to Malta's connection to the European gas network, however, there isn t a direct feedback in the plan, but Snam Rete Gas is ready to implement the measures necessary to facilitate their connection to the national network, when the progress of the project will prefigure an effective commitment to its realization. REGIONAL NETWORK DEVELOPMENT PROJECTS The regional network consists of infrastructure with interregional, regional and local extensions, often interconnected, supplied by one or more entry points from the national network. The need to reinforce and develop the regional network responds to the following needs: reinforce the network to implement new transmission capacity, in order to sustain in the medium to long term the increases in gas demand occurred in certain area; reinforce (and/or extend, in the case of a new delivery areas) the network as a consequence of the realization of new redelivery points or new TEN-YEAR NETWORK DEVELOPMENT PLAN 65

66 interconnection points with other transmission networks. To determine the size of the above network reinforcements, Snam Rete Gas considers the winter peak gas demand. In fact, these conditions strongly characterize the withdrawals of the distribution network. Assessments are carried out at these conditions because the regional network is at its most stressed conditions, as it is closer to the points of consumption. The identified technical solutions take into account possible synergies with the need of adjustment of the existing network in order to optimize overall costs. In the plan, spread over the whole Country, there are about 140 projects of development of the regional network (including the projects for new connections to delivery points), which will involve the construction of over 390 km of new pipelines. In the framework of several development projects of the national network, new pipelines related to the development of the regional network of a further 140 km length are also planned. The main regional network reinforcements, included in the plan, are located in the area of Liguria, Lombardia, Campania and Calabria. In particular, in Calabria, numerous works are scheduled to expand the network under the plan of converting the region to natural gas from other fuels. LOMBARDIA EXPANSIONS On the Lombardy regional network, several important expansions are planned partially are already under construction with the aim to adapt the performance of the network to the local natural gas market. In the North West of the network there will activities on the main Lainate - Olgiate Olona (10 km of main pipe and 4 km of connections). In the Central East area are expected network developments in the area between Azzano Mella (BS) and Zanica (BG). Till today, with the aim to complete this infrastructure, is in progress the segment Travagliato - Mornico al Serio (25 km). FIGURE 21: LOMBARDIA EXPANSIONS 66 TEN-YEAR NETWORK DEVELOPMENT PLAN

67 GAVI PIETRALAVEZZARA PIPELINE The project involves the construction of a pipeline of about 27 km of main pipe and 8 km of connections in replacement of the same section of the Cortemaggiore Genoa pipeline. The new pipeline will increase the transmission capacity of the regional network, in line with the gas market growth in the relevant area; it will also increase the safety and reliability of the gas transmission service which supplies Genoa and its surrounding district. FIGURE 22: GAVI-PIETRALAVEZZARA PIPELINE CONNECTION PIETRAVAIRANO - PIGNATARO MAGGIORE In Campania has been planned the construction of a new pipeline of approximately 25 km with departure from the pipeline Transmediterranean "A" and arrive on the pipeline Melizzano - Cisterna. The new connection will help to strengthen the pipeline Melizzano - Cisterna, in the stretch Melizzano - Pignataro Maggiore, to the supply of the natural gas to a plurality of delivery points among which we highlight two thermoelectric plants and the area of Naples, restoring transportation assets in line with the criteria of reliability and flexibility required. It will also help to increase the security of natural gas supply, considered as a second power supply for these markets, being able to ensure the supply even in case of power unavailability from Melizzano. FIGURE 23: CONNECTION PIETRAVAIRANO PIGNATARO MAGGIORE TEN-YEAR NETWORK DEVELOPMENT PLAN 67

68 SUPPLYING METHANE TO THE CALABRIA REGION Throughout the Region of Calabria is planned the completion of the natural gas network of the region, following the signing by the distribution companies of contracts for connection to the pipeline network of Snam Rete Gas. These works, which include the construction of pipelines for about 310 km, and that include 17 adductors (of which 14 are already completed) for 62 redelivery points (of which 49 are already completed). FIGURE 24: SUPPLYING NATURAL GAS TO THE CALABRIA REGION CONNECTION PROJECTS In accordance with Decree 164/2000 "Implementation of Directive n. 98/30 / EC concerning common rules for the internal market of natural gas, in accordance with Article 41 of Law 17 May 1999 n. 144", Snam Rete Gas as company carring out transmission and dispatching activities is obliged "to connect to its network users requesting it when its system has enough capacity and if the necessary works for the connection are technically and economically feasible." The connecting projects, depending on the connected infrastructure and on the size of the connection pipeline, can be part of the National Network or of the Regional Network. The connecting projects whose realization is foreseen in the time-frame of the plan are inserted in the document. 68 TEN-YEAR NETWORK DEVELOPMENT PLAN

69 COST-BENEFIT ANALYSIS METHODS The methods to analyze the cost/benefit ratio used to assess the Snam Rete Gas ten-year plan is based on the methodology "Energy System Wide Cost-Benefit Analysis Methodology" published from ENTSOG in February This methodology of cost / benefit analysis has been used in the evaluation of PCI and in the valuation of investments in the European ten-year development plan. The method requires a financial, economic and qualitative analysis. The financial analysis is not the subject of this document, because the revenues and costs are determined according to the regulatory Italian framework. Economic analysis is based on the calculation of the following economic indicators: NPV - Net Present Value; IRR - Internal Rate of Return; C/B - Relation Benefits Costs. In order to enhance them, Snam Rete Gas carried out a benefit monetization of the projects; for details, please refer to the following paragraphs. The qualitative analysis is based on a number of indicators that are divided by ENTSOG in indicators calculated on the transport capacity at interconnection points ("capacity-based") and indicators that consider availability of gas flows based on the results of the model applied by ENTSOG ("modeling based"). Taking into account that the analysis of this document is performed with reference to the Italian system and considering that the model based indicators calculated by ENTSOG are related to groups ("clusters") that aggregate the projects of several transporters and therefore they are not applicable to the national system, for the evaluation of the development plan of Snam Rete Gas have been used the capacity indicators N-1, IRDI and BPI. Together with these, Snam Rete Gas has assessed additional 2 capacitive indicators, the IDI and RFI, which already found application in the previous ten-year plan of Snam Rete Gas. All these indicators measure the achievement of important objectives: security of supply, competitiveness and market integration. The capacity indicators are assessed at the beginning of the plan time horizon, after the first three years and at the end of the ten-year period. This kind of analysis is applicable to the national development projects in the ten year plan, but it can not be applicated to the regional development projects. CAPACITY INDICATORS The indicators proposed are: The N-1 indicator, which describes the ability of the gas system to meet the TEN-YEAR NETWORK DEVELOPMENT PLAN 69

70 daily peak demand in case of interruption of the main import infrastructure. The N-1 indicator provides a main measure for supply security. Values greater than or equal to 100% of the index show the system s ability to cope with the interruption. The indicator is among those proposed by ENTSOG in the methods. Import Route Diversification Index or IRDI: This indicator is based on the logic of the Herfindahl Hirschman index and it measures the degree of concentration of the sources and import ability. According ENTSOG do not exist defined thresholds, although values in the range 0-3,300 are definitely indicative of a good diversification. The indicator provides information about supply security and the degree of competitiveness of a gas market. The indicator is among those proposed by ENTSOG in the method analysis and was used to assess the european ten-year plan. Bidirectional Project Index or BPI: This indicator measures the percentage of the overall counter-flow capacity of the prevailing flow. If greater than 0%, it indicates the presence of bi-directional capacity. The indicator is among those proposed by ENTSOG in the method analysis, even if it wasn t used to assess the european ten-year plan. In this document, the indicator is applied considering the set of entry and exit points of the system transport. The Import Dependence Index (IDI) measures the dependence on imports and the ability to meet daily demand from storage and indigenous production. The indicator IDI characterizes both the security of supply and the degree of competitiveness of a gas market; more its value tends to 0, more the imports are independent. A value of 100 indicates the total dependence by imports. The indicator was among those proposed by the ENTSOG in the evaluation of the TYNDP published in July 2013, but is not present in the new methodology. Remaining Flexibility or RF Index assesses the capacity not involved in the day of maximum demand. Higher is the remaining capacity, and greater is the flexibility available for network users for rescheduling flows. The indicator values range between 0% and 100%. A low figure indicates a lack of flexibility, and provides the main assessment of the integration of markets. Values below 5% are considered indicative of critical situations. The indicator was among those proposed by ENTSOG in the evaluation of TYNDP published in November 2013, but is not present in the new methodology. The indicator used here considers all input flows, and all the capacity of supply, while the indicator defined by ENTSOG considered the input flows through pipelines and their capacities, at any interconnection point. The enhancement of the indicators, which takes into account only those projects whose realization is expected to fall in the reference decade, was made considering three different conditions. The first is the inertial, which is based on the assumption that in the investigated period no investment network is realized, in order to quantify the benefits produced by the ten-year plan of 70 TEN-YEAR NETWORK DEVELOPMENT PLAN

71 development. The second includes projects with approved final investment decision (), as projects related to the bidirectional cross-border flows. Finally, the last condition also considers projects without final investment decision ( + non-): interconnection with Slovenia and development for new import from South. The following section shows the results of the indicator improvements. All the assumptions in the calculations and further details concerning the cost/benefit ratio analysis methods are described in Annex 3. RESULTS OF CAPACITY INDICATORS The table shows the ability of the Italian gas system to meet the peak demand in case of interruption of the flow at the Tarvisio entry point (N-1) and the system has sufficient margins to safety in all configurations. In particular it is noted that the and the inertial scenario are equivalent, because the only investment that differentiates them is the "Support to the North West market and bidirectional cross- border flows" that provides for the flexibility of the system but does not increase the capacity at the entry points. As regards the configuration + non, the value is the same to the preceding with regard to the period until the end of three years, instead it increases at the end of the plan horizon through the contribution of non- projects. TABLE 22: N-1 INDICATOR VALUES N REFERENCE INERTIAL > 100% > 100% + NO > 100% The table below shows the result of the diversification index of the sources (IRDI). The numbers shown in the following table are all below the value of 3,300 that ENTSOG refers to as the threshold of good diversification of sources and supply routes. This is due to the contributions originating from new national gas pipelines which allows the national grid to be connected to new international gas pipelines. Note that in the absence of these developments, the concentration index would remain almost constant, as shown by the trend of the inertial value. TABLE 23: IRDI INDICATOR VALUES IRDI REFERENCE INERTIAL < < NO < The indicator of bidirectional capacity (BPI) shows how, at the end of the plan period, the Italian transmission system can benefit from the counter-flow capacity for about 16% of the total import capacity at the end of the plan in condition, thanks to the project "Support to the North West market and bidirectional cross- border flows". This indicator shows an increase in the level of TEN-YEAR NETWORK DEVELOPMENT PLAN 71

72 integration with other European markets. TABLE 24: BPI INDICATOR VALUES BPI REFERENCE INERTIAL ND ND + NO ND The index of import dependence (IDI), shown in the following table, shows high values, as is to be expected for the Italian system where indigenous production covers only a small percentage of demand. TABLE 25: IDI INDICATOR VALUES IDI REFERENCE INERTIAL ND ND + NO ND The residual flexibility index (RF) improves over the years in the configuration + non due to the "Adriatic Line" project, and allows users of the transport system good margins of flexibility. TABLE 26: RF INDICATOR VALUES RF REFERENCE INERTIAL > 5% > 5% + NO > 5% As shown in the above tables, the investments on transmission networks allow an improvement of the indicators and represent an increase in benefits for the gas system related to the supply security, competitiveness and integration among the markets. ECONOMIC INDICATORS The economic analysis consists in the calculation of the following indicators, in line with the ENTSOG "Energy System Wide Cost-Benefit Analysis methodology" of 13/02/2015 (see Annex 3): NPV - Net Present Value: It represents the discounted cash flow of the project; IRR - Internal Rate of Return: it is the economic sustainability of the project because of its ability to generate an economic return which is higher than the investment and operational costs; Benefits costs ratio (B / C): is the relationship between the benefits and the discounted costs. 72 TEN-YEAR NETWORK DEVELOPMENT PLAN In accordance with the ENTSOG methodology, economic analysis has been conducted since the first year of project expenditure up to 20 years after the first year of availability of the project. The methodology for the determination

73 of the costs and the benefits for each project is described in the following paragraphs. The results of the indicators calculation are reported in Annex 7. COSTS QUANTIFICATION Following the methodology proposed by the "Energy System Wide Cost-Benefit Analysis Methodology" of ENTSOG of , the project costs have been determined as the sum of the fixed investment costs and operating variable costs. BENEFITS DETERMINATION National network projects Quantitative analysis RN-01 Support to the Northwest market and bidirectional cross-border flows In order to quantify the benefit from the realization of the project "Support to the northwest market and bidirectional cross-border flows" has been evaluated the benefit concerning the decrease of delivery costs for the domestic market, due to a major use of infrastructures as a consequence of exports flows. In particular, in line with the "high scenario" case of the chapter "Demand and supply of natural gas in Italy", an export flow of 5 billion cubic meters from Passo Gries point has been considered since 2022, for all the period of the analysis. A booked capacity at the exit point of Gries Pass of 29 Mscm / day on a monthly basis for a period of 6 months (with an utilization rate equal to 0.9) and an equivalent value of booked capacity in correspondence of the entry points of the national gas network have also been considered. The profile of the capacity booked as a consequence of the activation of export flows is available in the following table 27. TABLE 27: EXPORT CONTRIBUTION [MSCM/D] MONTH 2 MONTH 4 MONTH 6 MONTH 6 MONTH 6 MONTH 6 MONTH From the point of view of the applied tariffs, it has been estimated a capacity at the Passo Gries exit point in the period between 1,8 and 1,6 /year/scm/day (a multiplier equal to 1,3 for the booking on a monthly basis, similar to that applied for entry points) and an average for entry points of the national network estimated at 2 /year/scm/day (a multiplier equal to 1,3 for the booking on a monthly basis has been applied). A commodity charge estimated in about 0,0035 /Scm has been applied to the entry volumes forecasted for export. The benefit has been evaluated by determining the reduction of transport costs allocated to the domestic market made possible by the project with the activation of export flows. The annual benefit has been estimated of about 90 M. TEN-YEAR NETWORK DEVELOPMENT PLAN 73

74 RN_02 Interconnection with Slovenia The project benefits has been estimated in the same way applied for the project "Support to the northwest market and bidirectional cross-border flows". The export flow at about 0,1 billion Scm per year and the booking profile has been estimated in 0,3 Mcm/day (with a coefficient of use equal to 0.9) from the year of full operation of the investment. From the point of view of the applied tariffs, it has been estimated a capacity charge of about 1,8 /year/scm/day at the San Dorligo della Valle and an average charge for entry points of the national network estimated at 2 /year/scm/day. A commodity charge estimated in about 0,0035 /Scm has been applied to the volumes forecasted to enter in the system for their subsequent export. The annual benefit has been estimated in about 1,4 M. RN_03 Adriatica Line In order to quantify the benefit from the construction of the "Adriatica Line" project, it has been considered the gas flows made available by the construction of Adriatica Line, that enter at the entry points of the national network in the southern Italy. It is expected an increase of 24 MScm/day of the gas booked at the entry points of the south of Italy(with a coefficient of use equal 0.9). An average charge for the entry points of the national network located in the southern Italy has been estimated in 3,8 /year/scm/day and the commodity charge amounting to approximately 0,0035 /Scm has been applied to the volumes forecasted to enter in the system for their subsequent export estimated in 8 BScm/year.The benefit has been evaluated by determining the reduction of transport costs allocated to the domestic market made possible by the project. The annual benefit has been estimated in about 120 M. Further enhacement works for increasing import capacity The projects "Import developments from north east", "Additional southern developments" and "Galsi project" allow to improve the system's import capacity at existing points or new import points. These projects are included in the Plan limited to engineering and acquisition of permits activities. At this moment, because of the indefiniteness of demand and supply scenarios that will be valid at the moment of the realization of these projects (foreseen out from the time period of the plan) only a theoretical approach is possible. An hypotetic booked capacity of 24 MScm/d, that with the application of a coefficient of use equal to 0.9 bring to an increment of incoming flows of about 8 BScm/year, has been considered. The average charge for the entry points of the national network located in the southern Italy has been estimated in 3,8 /year/scm/day (applied to project "Additional southern developments"), The average charge for the entry points of the national network has been estimated in 2 /year/scm/day (applied to projects "Import developments from north east" and "Galsi project"). The benefit of the projects can be determined as reduction in transportation costs for the domestic market, made possible by the 74 TEN-YEAR NETWORK DEVELOPMENT PLAN

75 realization of the projects on the basis of an increase of the transported gas. A commodity charge of about 0,0035 /Scm has been applied. The annual benefit for the projects "Import developments from north east", "Additional southern developments" and "Galsi project" has been estimated respectively in about 76 M, 120 M and 76 M. New connections These projects guarantee the supply of gas from sources today not available. The sustainability of these projects is guaranteed by the Snam Rete Gas Network Code. It determines that, a part a franchise, the subject that asks for the connection have to pay a contribution equal to the difference between the forecasted cost of the project and the asset increase such that the revenue associated with the new investment is equal to that generated by applying the tariffs approved by the Authority to the capacity associated with the new Delivery/Redelivery point. Qualitative analysis Benefits evaluated only on a qualitative way are quoted below. These benefit are to be added to the quantitative ones described in the previous paragraphs. Security of supply The project "Support to the North West market and bidirectional cross-border flows" allows to face a scenario in which the entry point of Passo Gries, for reasons not depending by Snam Rete Gas, may have an inflow equal to zero (possible situation for both commercial and technical factors already occurred in the past), together with an availability of gas storage in the north-west area which could be limited and run out, decreasing the contribution of this source. With the facilities available today, in this particular condition, it would be difficult to guarantee market s coverage of the north-west Italy in a climatic context of normal winter. The infrastructure provided by the project instead makes possible to supply this area with gas coming from other sources, giving a benefit in terms of security of supply resulting from the gas demand coverage that would not otherwise be satisfied (*). "Adriatica Line", "Import developments from north-east", "Additional southern developments" and "GALSI" would provide the flexibility and diversification sources needed to ensure the security of gas supplies in a context of reduction of the incoming gas flows from Passo Gries and increase of gas demand in Italy. Also the projects "Pipeline Biccari - Campochiaro", "Pipeline Brindisi - Massafra, "Regulation plant of Moliterno" and "TAP Interconnection" make available new import points and/or diversify the existing capacity of the system to new import points from south, ensuring the access to new sources of gas. (*) English Regulator OFGEM estimates the value of lost loads as the value that consumers are available to pay to avoid interruption in gas supply in 630,000 /GWh. A similar value is under evaluation by ENTSOG in the context of the compilation of TYNDP TEN-YEAR NETWORK DEVELOPMENT PLAN 75

76 Market Integration The project "Support to the North West market and bidirectional cross-border flows" allows to increase the integration of the Italian market with other European markets. This integration is an enabling factor for the price alignment between the different hubs. It is possible to forecast that, creating an interconnection between Italian hub and Nord European hubs (that are the most liquid of the continent), the gas price at PSV will decrease merging towards the price of the interconnected hubs. Competition It is possible to foreseen that projects aimed to the creation of interconnection with import sources of supply today not accessible ("Import developments from north-east", "Pipeline Biccari - Campochiaro", "Pipeline Brindisi - Massafra, "Regulation plant of Moliterno" and "TAP Interconnection"), will increase the competition of Italian gas Market, positively affecting the medium Italian price of gas. The gas coming from new sources of supply could enter to Italy with a price lower than the gas coming from traditional sources. The new gas could replace the gas at higher marginal price, leading to a potential reduction of Italian medium gas price. Sustainability The projects that implicate an increase of the total capacity of the system ("Adriatica Line", "Import developments from north-east", "Additional southern developments" and "GALSI") could support the gas market related to thermoelectric generation that is foreseen to increase as a consequence of the gradual decarbonisation of the sector. Therefore these projects could cause the substitution of source that cause an high production of CO2 with Natural Gas, leading to a reduction in the production of the pollutant. The higher will be the containment of the CO2 production through the application of a carbon tax, the higher will be the benefit produced by these projects. Regional network projects The analysed quantification of economic benefit coming from the realization of project on the regional network depend on the kind of project took into account. Realiazation (and/or reinforcement) of new redelivery points or new points of interconnection with other transport networks and related network developement The sustainability of new connections (of reinforcement of the existing ones) is guaranteed by the Snam Rete Gas Network Code as described for the new connections of the national network. The benefits for the projects of reinforcement of the network related to new connections (branch of regional network) have been estimated considering the change in the supply cost (**) coming from substitution of fuel used today with natural gas. The annual gas demand covered by these projects has been 76 TEN-YEAR NETWORK DEVELOPMENT PLAN

77 determined as the sum of the data indicated in the requests for the new connections related to the reiforcement of the network considered. The examined projects increase also environmental sustainability thanks to the replacement of most polluting fuel with natural gas, which is the fossil fuel with the lowest emissivity impact. (**)The gas supply price is taken from AEEGSI annual report, chapter 3, Economic Condition paragraph. The Price for the other fuels is the medium annual price of the ones published on MiSE website. Projects aimed to increase the transport capacity of the existing network to supply the increase of the local demand of gas This kind of projects are planned taking into account as indicators of the level of "saturation" of the network, the following parameters in a maximum transport scenario (extreme temperatures), with the aim of bringing them to established values of acceptability: the pressure drop along a pipeline: the loss of pressure in a pipeline are considered critical for the continuity of the transport service when lead the pressure at the end of the pipeline to decrease under the 70% of the initial one; the gas speed along the pipelines: speeds too much high induce vibration and noise in the plants. A speed value of 20 m/s has been taken into account as reference limit; the flow transiting through control/reduction systems: the hourly flow passing over the pressure reduction systems must be less than the maximum rated capacity of the plant, otherwise it must be planned a revamping. Solutions which, compared to a useful life of the investment of 50 years, can ensure long-term further margins of flexibility in terms of transport capacity are planned and realized. Benefits of these projects concern the continuity of gas supply to the local market in conditions of particular high gas demand. The supply, as expected by regulation (EU) 994/2010 must be safeguarded in case of extreme temperatures during a 7-day peak period occurring with a statistical probability of once in 20 years. As a consequence the disrupted demand in case the project will be not realize has been determined in the case the mentioned climatic conditions will happen (1st step). The dimensioning of the project would also carry a further quantity of gas by exploiting the margins created (2nd step). A volume of gas equal to the sum of the two mentioned steps has been associated to each project and the value of lost load has been applied to this value (***). It is remarkable that if the second step was considered for the 20% of his amount about the 80% of the analysed projects would present very positive indicators. In order to give a view of the real maximum potential of the projects the evaluation in the Annex takes into account the 100% of the 2nd step. TEN-YEAR NETWORK DEVELOPMENT PLAN 77

78 The presented projects bring also other benefit here below described in a qualitative way: network modernization due to laying new pipelines in aid or replacement of existing ones with a consequence increase in security of the infrastructure coming from the use of the most modern technologies; increase of the level of flexibility and safety of transport, when the reinforcement is a new interconnection inside the network; increasing the flexibility in case of scheduled or unscheduled interruptions of the gas flow. In these situations the greater volume of gas inside the pipeline, could supply the downstream market for a longer time. (***) English Regulator OFGEM estimates the value of lost loads as the value that consumers are available to pay to avoid interruption in gas supply in 630,000 /GWh. A similar value is under evaluation by ENTSOG in the context of the compilation of TYNDP COSTS AND FINANCING The overall investment expenditure for the period , related to the development projects amounts to approximately 2.9 billion Euros. In the following table is indicated the expenditure for the first 5 years of the plan. TABELLA 28: DEVELOPMENT PROJECTS' COSTS DEVELOPMENT PROJECT (MILION EUROS) The projects will be either self-financed, including cash flows originating from operating activities, financed, through the parent company Snam, by debt, capital through the issuing of bonds, financial institution loans or special purpose loans granted by national or international agencies (e.g.: the European Investment Bank (BEI), the Italian Cassa Depositi e Prestiti (CDP), etc.), or through a contribution mechanism where required and obtained, in accordance with relevant rules, by public agencies (Italian or EU) or by the beneficiaries subjects. 78 TEN-YEAR NETWORK DEVELOPMENT PLAN

79 Annex

80 ANNEX 1: GAS DEMAND FORECAST The annual gas demand for Italy is processed for the various sectors of use (according to the classification used by the National Energy Balance) through econometric models that take into account the development over time of the economic and energy indexes of the various sectors and the development of the competitiveness between energy sources. Particular attention is paid to the thermoelectric power generation sector, where the forecast for gas demand is obtained through a computational model that takes into account the expectations of electricity demand, fuel competitiveness, among fuels and among generation technologies and the competition among plants. The projections for power stations development is obtained through commercial information, the development plans of the main sector operators and any other source deemed reliable. Typically, the time forecast covers a period of ten years. The expectation of demand at the national level is subdivided over the territory by taking into account the localisation of the re-delivery points, in order to provide a geographical distribution of consumptions on the natural gas transmission network. The evolution of consumption at each re-delivery point is processed using linear regression models that consider historical withdrawals, assigned capacity, recorded load factors and any other available technical and commercial information, which might be available and can be used to establish a gas demand forecast. In addition to the geographical transmission of the demand forecast, the time transmission profile of withdrawals over the year is modeled. In fact, the daily scenarios of Daily gas demand have a significant variability over the course of the year since they are influenced both by the seasonal climate and by the cyclical nature of the industrial production. Daily scenarios are obtained by simulating the annual scenario through daily coefficients specific to each redelivery point, processed from the daily usage history. To assess specific and critical situations on the gas transmission network, daily scenarios of "extreme" demand are also simulated at daily resolution, such as gas demand in conditions of extreme cold, scenarios of summer minimum usage of the transmission network, or scenarios of gas demand that take into account exogenous factors including, for example, the unavailability of electricity production from renewable sources or a momentary lack of electricity import from abroad. As an indication, the ratio between the winter daily average demand and the summer one is about 2 to 1 in standard conditions, while it reaches to 3 to 1 in conditions of extreme cold. 80 TEN-YEAR NETWORK DEVELOPMENT PLAN

81 ANNEX 2: TRANSMISSION CAPACITY DETERMINATION METHOD The transportation capacities at the Entry, Exit and Redelivery Points of the transportation network are defined in chapter 2 of the Network Code, which also describes the methods used by SRG to calculate these capacities. The transportation capacities at the Entry Points, interconnected with foreign pipelines or LNG terminals, are calculated by means of hydraulic simulations of the transportation network, defining the inflows and outflows to/from the network and complying with network operation constraints. The input data of the simulations are the daily flow rate and pressure values at the Entry Points and the daily flow rate values at the Exit/Redelivery points. The results of the simulations are the pressure values at the Exit/Redelivery points, the flow rate and pressure values of the gas flowing through the various sections of the network and the values of the characteristic parameters (e.g. the power and number of revolutions per minute) of the operation of the compressor stations. The transportation capacities may be put at the disposal of users with firm or interruptible transportation services. Firm transportation capacities are calculated in such a way that the resulting capacity value is guaranteed under all circumstances at all times of the Thermal Year. The firm transportation capacities are made available for a period of several years. In addition to the firm transport capacity, are calculated and made available, on an annual basis, the interruptible transport capacities, whose values are determined by adopting less strict operating constraints than those used to calculate the firm capacities. The transportation capacities at the Exit Points interconnected with foreign pipelines are calculated in a similar manner to those used for the Entry Points, taking into account the need to guarantee the transportation capacities at the Exit Points without interfering with the supply of the markets connected to the network in Italy. The transportation capacities at the Exit Points interconnected with foreign pipelines are made available on a yearly basis. Further information about the process to determine the transportation capacity on the SRG network - including the technical characteristics of the simulation system - is provided below. SIMULATION PROGRAMS The computerized system used for the transportation simulations consists of a set of programs for simulating mesh networks and compressor stations in a steady state. The system currently used is called SIRE2000 and was designed on the basis of specifications laid down by SRG. Interaction between the system and SRG operators takes place through a graphical interface, which is used to enter the data required by the system and to analyse the results of the simulation. The main characteristics of the system enable the operator to: TEN-YEAR NETWORK DEVELOPMENT PLAN 81

82 create a model of the network consisting of sections of gas pipeline and calculation points corresponding to physical elements such as main nodes connecting pipelines, detachment points of off-takes or distribution networks and changes in diameter or altimetry of the pipelines. Calculation points are also set at the intake and delivery of compressor stations, at the Entry Points interconnected with import pipelines/lng terminals and production fields, and at the interconnections with the storage fields; concentrate the gas inflows and outflows to and from the network at the calculation points; simulate the network to calculate the following parameters, by solving a system of transportation equations on the basis of formulae and models recognized by scientific literature and the technical gas associations: pressure, temperature and composition of the gas at the calculation points; flow rate and composition of the gas in every section of the gas pipeline; operating points of the compressor stations; use a model for the compressor stations based on: application of the control criterion of the station for distributing the flow between the units; realistic simulation of the operating point of compressors and turbines, using a mathematical model that describes the characteristic curves of each individual machine obtained from the field measurements (where available) or the expected curves provided by the manufacturers; this simulation provides quite an accurate determination of the operating range of the plants based on the actual limit curves (antisurge, minimum and maximum number of revolutions, maximum power); calculation of the characteristic parameters of the compressor units based on the model of the machines (e.g. gas consumption, power required by the compressor, power provided by the turbine, number of revolutions per minute). The calculation models used adopt the following main basic equations: CALCOLO DELLE PERDITE DI CARICO EQUATION OF STATE FOR CALCULATION Z AND DERIVED FACTORS CALCULATION OF FRICTION FACTOR CALCULATION OF VISCOSITYR FERGUSSON EQUATION REDLICH-KWONG EQUATION COLEBROOK EQUATION DEAN-STIEL METHOD OPERATING CONSTRAINTS DELIVERY PRESSURE The minimum contractual pressures for delivery at the Entry Points, agreed upon with the operators interconnected with the transportation network as early as the interconnection plant sizing phase, are published on the web site of SRG, in accordance with the provisions laid down by the Network Code. 82 TEN-YEAR NETWORK DEVELOPMENT PLAN

83 The delivery pressure values presently in operation are: ENTRY POINT MINIMUM CONTRACTUAL PRESSURE (BARG) TARVISIO 52,5 GORIZIA 58 PASSO GRIES (*) 49 MAZARA DEL VALLO 75 GELA 70 PANIGAGLIA 70 LIVORNO 80 CAVARZERE 70 (*) Pressure read at the measuring station of Masera. MAXIMUM PRESSURES IN THE NATURAL GAS PIPELINES The pressure inside a gas pipeline must never exceed the maximum operating pressure of the pipeline required by law, that is the pressure stated to the competent authority (VVF), a value which generally is equal to the design pressure of the pipeline. In transportation simulations, values 1 bar lower than the maximum operating pressure are considered as maximum pressures to avoid the risk of exceeding maximum operating pressure by effect of changes in the height of the pipeline or transient transportation conditions. Some sections of the pipelines downstream of the Entry points of Passo Gries and Tarvisio, laid in the early seventies and almost completely duplicated or triplicated with new lines, are operated at maximum pressures lower than the maximum operating pressure of the pipelines. MINIMUM PRESSURES IN THE NATURAL GAS PIPELINE The minimum pipeline pressure constraints take into account: the minimum operating pressures of the compressor stations, adjusted to cope with pressure fluctuations on the network during the day or possible surges; the compression ratios of the compressor stations, which, on the SRG transportation network, take on values of between 1.4 and 1.5 (70/50 barg on the transportation network with a CPI of 70 barg and 75/50 barg on the transportation network with a CPI of 75 barg); the need to maintain a minimum pressure level at the terminals of the networks that branch off from the nodes and from the transportation network so as to meet the withdrawal peaks that would otherwise tend to empty the pipes at peak hours (the amount of gas in the pipelines is directly proportionate to the pressure); the minimum redelivery pressures at the storages, adjusted to cope with pressure fluctuations on the network during the day or possible surges. The minimum pressure constraints in the gas pipelines are set at the input of the compressor stations and at the main nodes of the transmission network so that the pressure is always higher than the minimum allowed values at all points of TEN-YEAR NETWORK DEVELOPMENT PLAN 83

84 the simulated network. The minimum pressure is 49 barg at the nodes of Mortara and Sergnano and 54 barg at the node of Minerbio. A value of 49 barg should be considered as the minimum pressure at the input of the compressor stations. OPERATION OF THE COMPRESSOR STATIONS In the transportation simulations, the compressor stations operate under the following conditions: station power, defined as the sum of the power outputs of the turbines in operation, equivalent to 95±1% of the maximum available power (MW); number of compressor and turbine revolutions per minute, equivalent to 100±1% of the nominal revolutions per minute (RPM). The operating ranges defined above ensure safety margins which, taking into account the approximations inherent in simulating the operation of the units, enable the operating conditions that may actually arise during normal operation (mainly transitory events associated with daily fluctuations in transportation) to be tackled. In order to ensure the reliability of the transmission system under normal operating conditions, a certain number of spare compressor units are kept at each station, to guarantee that the total power of the spare units is equivalent to or greater than the power of each unit in operation. For example, at a station made up of two compressor units with a rated power of 10 MW and two compressor units with a rated power of 25 MW, the maximum rated power for which spare units are available is 45 MW. Other limitations in the management of stations are determined by: the mapping of the compressors installed, which delimits the range of heads/flow rates allowed for each machine; the reduction coefficients of the power output of the turbines and of the efficiency of the compressors, which take into account the ageing of the machines; the head losses at the filters, the air coolers and the station s pipe-works. INFLOWS AND OUTFLOWS TO/FROM THE NETWORK The gas inflows and outflows to and from the network are defined on the basis of the general criteria described here below. Redelivery Points The withdrawals of gas from the Redelivery Points are not constant throughout the year but are subject to seasonal variations (for example a different incidence between summer and winter for heating or seasonal behavior of some industry sectors); therefore, the estimation of outflows is carried out elaborating multiple scenarios, which represent the daily flow prediction, for different periods of the year, of each redelivery point. 84 TEN-YEAR NETWORK DEVELOPMENT PLAN

85 Entry and exit points of the national network interconnected with foreign countries The annual firm transportation capacities are calculated considering a summer consumption scenario, which represents the most severe scenario for the Entry Points from the South and the North-East, characterized by lower gas consumption with respect to other scenarios. In this scenario, gas put into the Entry Points must be transported for long distances to the storage fields situated in the North-Western, North-Eastern and Central areas of Italy. The annual transportation capacities (firm and interruptible) calculated in this scenario may therefore be guaranteed at any other time of year. For the Entry Point of Passo Gries, situated near the storage fields and major consumption centres, the seasonal effect on transportation is less accentuated and it must therefore be checked on each occasion which scenario allows the firm transportation capacity to be guaranteed at any time of year. The interruptible transportation capacities are determined both with summer and winter scenarios. Transportation capacities at Exit Points of Passo Gries, Tarvisio and Gorizia are evaluated on the basis of a winter scenario which represents the most severe one. As a matter of fact in this scenario gas export volumes must be transported with gas volumes assigned to the local market that, in winter time, are the highest of the year. Therefore capacity transportation evaluated under such a scenario can be guaranteed during the whole year. Storage and national production fields The storage fields are characterised by outflows from the network in the summer scenarios and inflows to the network in the winter scenarios. In summer scenarios an outflow to the storage fields of 60 MScm/day is considered. This value is consistent with the hypothesis of putting into storage, in the summer period, a total volume of gas for a storage replenishing campaign after a particularly cold winter. In winter scenarios, an inflow from the storage fields capable of compensating for the difference between the inflows (import and national production) and outflows (redelivery points and export) on the network is considered, taking into account the output capacity and the historical output flow rate of each individual field. The inflows to the transmission network from the national production fields are determined on the basis of the forecasts made by the operators of the production fields on the annual production volume and the production volumes of each individual field taken from the historical data, assuming a constant production rate during the year. TEN-YEAR NETWORK DEVELOPMENT PLAN 85

86 ANNEX 3: COST-BENEFIT ANALYSIS METHOD The method used on the individual indicators used is shown below. Capacity Indicator Details The indicators used are the following: Indicator N-1: describes the ability of the gas system to meet the daily peak demand in case of interruption of the main import infrastructure. Where: - IP is the technical capacity of all the entry points of the national gas pipeline network - NP is the national production of natural gas - UGS is the maximum technical delivery of national storages - LNG is the sum of the national network s entry capacity from the regasification terminals -I is the technical capacity of the main gas infrastructure with the highest capacity to supply the market, including gas infrastructure connected upstream or downstream to a common gas infrastructure that cannot be operated separately - Dmax is the total daily gas demand related to a day with an exceptional high gas demand statistically monitored once every twenty years - Each parameter is expressed in millions of cubic meters a day Index of import dependence (Import Dependence Index or IDI): It measures the coverage degree of the daily demand related to the storages and national production. Where: - NP is the national production of natural gas expressed as a percentage of the annual average demand - UGS is the maximum technical delivery of national storages, expressed as a percentage of the average annual demand Diversification Index of the supply sources (Import Route Diversification Index or IRDI): The indicator is based on the logic of the Herfindahl- Hirschman index and it measures the degree of concentration of the sources and import capacities. 86 TEN-YEAR NETWORK DEVELOPMENT PLAN

87 Where: - IPK is the technical capacity of each gas pipeline expressed in percent over the capacity for each national network entry point, including the regasification terminals - IPI is the technical capacity of each entry point of the national network of gas pipelines for each country of origin related to the imported natural gas, expressed as a percentage of the total for each supply source - LNG terminal-m is the entry technical capacity of the national network for each regasification terminal expressed as a percentage of the total of the entry technical capacities of the regasification terminals. Remaining Flexibility Index or RF: It assesses the capacity not involved in the day of maximum demand. Higher is the remaining capacity, greater is the flexibility in favor of users that can change the gas flow programs. Where: - The entering flow is the sum of the incoming flows, which include imports via gas pipeline, LNG, national production and storages, useful for meeting the total daily gas demand related to a day with an exceptional high gas demand statistically monitored once every twenty years. - The entering capacity is the sum of entry technical capacities, expressed in million cubic meters a day, which includes imports via gas pipeline, LNG, national production and storages. Bi-directional index capacity (Bidirectional Project Index or BPI): The indicator measures the effect of the counter-flow capacity over the overall capacity of the prevailing flow. Where; - Exit Capacity is the exit technical capacity from the national grid - Entry Capacity is the sum of the entry capacity of the national grid Economic Indicator Details Net Present Value NPV: represents the discounted economic cash-flow of the project. TEN-YEAR NETWORK DEVELOPMENT PLAN 87

88 Where: c = first full year of operation Rt = welfare of the Italian system induced by the project on year t For National Network has been evaluated the benefit concerning the decrease of delivery costs for the domestic market, due to the increment of gas flows and of booked capacity at import and/or export points, as a consequence of the realization of the projects. For regional Network has been evaluated the change of supply cost coming from substitution of fuel used today (or potentially used in the future) with natural gas in the case the projects determine an extension of the existing network aimed to feed an additional gas demand. For projects aimed to increase the transport capacity of the existing network to supply the increase of the local demand of gas has been evaluated and given a value to the disrupted demand (*) in case of condition of maximum transport. Ct = sum of CAPEX and OPEX on the year t CAPEX are represented in annex 5 OPEX are the medium operating costs for infrastructures differenziated for compression stations (medium cost for MW) and network (medium cost for km) n = year of analysis i = economic discount rate of the project = 4% (value indicated in ENTSOG metodology) f = first year of induced social welfare or cost Internal rate of return (IRR): this indicator represents the economic viability of the project being its ability to generate social welfare higher than its investment and operational costs. The indicator is defined as the discount rate that produces a zero ENPV. Therefore a project is considered economically desirable if the IRR exceeds its social discount rate. Benefit/Cost ratio (B/C): is the ratio between the discounted benefits and the discounted costs. (*) English Regulator OFGEM estimates the value of lost loads as the value that consumers are available to pay to avoid interruption in gas supply in 630,000 /GWh. A similar value is under evaluation by ENTSOG in the context of the compilation of TYNDP TEN-YEAR NETWORK DEVELOPMENT PLAN

89 ANNEX 4: PROJECT SHEETS The following table summarize the project information received by the parties interested in promoting interconnection projects to the Snam Rete Gas network, collected within the process of the Ten-Year development Plan of the Snam Rete Gas transmission network. TABLE 29: NATIONAL NETWORK PROJECT INFORMATION PROMOTER PROJECT NAME DESCRIPTION CAPACITY (MSCM/D PHYSICAL) PROJECT STATUS EXPECTED COMMISSIONING PLINOVODI D.O.O. M6 AJDOVŠCINA LUCIJA/LUCIA, SECTION OSP-KOPER/CAPODISTRIA + INTERCONNECTION POINT OSP/SAN DARLIGO DELLA VALLE CONNECTING THE COSTAL-KARST REGION AND DSO IN THE MUNICIPALITY OF KOPER/CAPODISTRIA 0,6 WAITING FOR FINAL INVESTMENT DECISION AFTER 2020 PLINOVODI D.O.O. PLINOVODI D.O.O. PLINOVODI D.O.O. PLINOVODI D.O.O. GALSI SPA INFRASTRUTTURE TRASPORTO GAS SPA API NÒVA ENERGIA S.R.L. IGI POSEIDON SA TRANS ADRIATIC PIPELINE AG GAS NATURAL SDG S.A. RECONSTRUCTION OD THE EXISTING PIPELINE M3 M3/1A GORIZIA/ŠEMPETER AJDOVŠCINA M10 VODICE RATECE + INTERCONNECTION POINT OF RATECE/TARVISIO M6 AJDOVŠCINA LUCIJA/LUCIA, SECTION AJDOVŠCINA-OSP AND KOPER/CAPODISTRIA - LUCIJA/LUCIA + INTERCONNECTION POINT OF SEŽANA/FERNETTI GALSI PROJECT ACCESS TO ITALIAN AND EUROPEAN GAS NETWORKS FOR ELBA ISLAND (*) LNG REGASIFICATION TERMINAL OFFSHORE OF FALCONARA MARITTIMA POSEIDON PIPELINE (PART OF THE PROJECT ITGI) TRANS ADRIATIC PIPELINE TAP LNG REGASIFICATION TERMINAL OF TRIESTE - ZAULE CROSS-BORDER TRANSMISSION 5,9 CROSS-BORDER TRANSMISSION 32,1 CROSS-BORDER TRANSMISSION 94 CONNECTING THE COSTAL-KARST REGION AND THE DSO IN THE MUNICIPALITIES OF KOPER / CAPODISTRIA, IZOLA/ISOLA, PIRAN/PIRANO AND SEZANA NEW GAS PIPELINE WHICH WILL CONNECT ALGERIA TO ITALY VIA SARDINIA THE PROJECT INVOLVES THE CONSTRUCTION OF A SEALINE PIOMBINO-ELBA ISLAND. THESE PROJECTS WILL ALLOW SUPPLY WITH NATURAL GAS ELBA ISLAND. THE PROJECT INVOLVES THE CONSTRUCTION OF A NEW OFFSHORE REGASIFICATION TERMINAL, 16 KM OFF THE COST OF FALCONARA MARITTIMA POSEIDON GAS PIPELINE, AS PART OF THE PROJECT ITGI, WILL ENABLE THE TRANSMISSION OF NATURAL GAS PRODUCED IN AREAS OF CASPIAN SEA, MIDDLE EAST AND EASTERN MEDITERRANEAN REGION TOWARDS ITALY THROUGH GREECE TAP WILL CONNECT THE EXISTING EUROPEAN GAS NETWORK WITH THE GAS ARRIVING FROM CASPIAN SEA LNG REGASIFICATION TERMINAL OF TRIESTE - ZAULE (*) Project updated in accordance with ITG TYNDP DA DEFINIRE 24,4 (PDE PORTO BOTTE) 0.06 (SEALINE PIMBINO- ELBA ISLAND) 25, ,8 25,8 WAITING FOR FINAL INVESTMENT DECISION WAITING FOR FINAL INVESTMENT DECISION WAITING FOR FINAL INVESTMENT DECISION WAITING FOR FINAL INVESTMENT DECISION WAITING FOR FINAL INVESTMENT DECISION WAITING FOR FINAL INVESTMENT DECISION WAITING FOR FINAL INVESTMENT DECISION WAITING FOR FINAL INVESTMENT DECISION FINAL INVESTMENT DECISION WAITING FOR FINAL INVESTMENT DECISION TO BE DEFINED AFTER TEN-YEAR NETWORK DEVELOPMENT PLAN 89

90 ANNEX 5: DEVELOPMENT PROJECTS The following tables list the development projects relating the transport infrastructures included in the Development plan with the main tecnical and economical features. TABLE 30: DEVELOPMENT PROJECTS OF NATIONAL NETWORK PROJECT CODE RN_01 PROJECT DESCRIPTION SUPPORT TO THE NORTH WEST MARKET AND BIDIRECTIONAL CROSS- BORDER FLOWS COMMISSIONING DATE DIAMETER KM MW COST [M ] /NOT / RN_02 INTERCONNESSIONE CON SLOVENIA ,5 0 7 RN_03 RN_04 RN_05 RN_06 DEVELOPMENT FOR NEW IMPORT FROM THE SOUTH ("ADRIATICA LINE") IMPORT DEVELOPMENTS FROM NORTH-EAST ADDITIONAL SOUTHERN DEVELOPMENTS GALSI OUT OF THE PLAN OUT OF THE PLAN OUT OF THE PLAN 1050/ /1050/ / RN_07 TAP INTERCONNECTION RN_08 MET. BICCARI-CAMPOCHIARO RN_09 RN_10 RN_11 RN_12 ALL. GAS NATURAL TERMINALE GNL DI TRIESTE ALL. GNL NUOVE ENERGIE P.TO EMPEDOCLE AG ALL. API NOVA ENERGIA GNL DI FALCONARA ALL.TO ITAL GAS STORAGE COMUNE CORNEGLIA OUT OF THE PLAN OUT OF THE PLAN NON NON NON NON NON NON , ,8-25 RN_13 MET. BRINDISI-MASSAFRA RN_14 IMP DI REGOLAZIONE DI MOLITERNO NON NON PROGRESS UNDER CONSTUCTION PLANNED PLANNED UNDER CONSTUCTION PLANNED PLANNED 90 TEN-YEAR NETWORK DEVELOPMENT PLAN

91 TABLE 31: DEVELOPMENT PROJECTS OF REGIONAL NETWORK PROJECT CODE RR_01 PROJECT DESCRIPTION ALL. CENTRALE ENIPOWER SPA DI TARANTO TA COMMISSIONING DATE DIAMETER KM CAPACITY PLANT [SCM/H] COST [M ] /NOT ,57-1,51 RR_02 ALL. COMUNE DI TAVERNA ,93-2,05 RR_03 ALL. COMUNE DI BADOLATO ,67-0,70 RR_04 RR_05 RR_06 ALL. COMUNE DI SANTA CATERINA DELLO IONI ALL. COMUNE DI GUARDAVALLE ALL. COMUNE DI MONASTERACE ,61-0, ,10-0, ,19-0,47 RR_07 ALL. COMUNE DI STILO ,04-0,06 RR_08 ALL. COMUNE DI BIVONGI ,20-0,81 RR_09 ALL. COMUNE DI PLACANICA ,82-0,38 RR_10 RR_11 RR_12 RR_13 RR_14 RR_15 RR_16 RR_17 RR_18 RR_19 RR_20 RR_21 RR_22 POT. ALL. DUCA VISCONTI DI VAPRIO D'ADDA ALL. ENI DIV. R&M DI CAMPOFILONE (AP) ALL. POWERFLOR S.R.L. DI MOLFETTA (BA) ALL. ZAPPALA' ROBERTO DI MESSINA ALL. METALUPIAE S.R.L. DI MURO LECCESE ALL. ENI R&M MIGLIANICO ADS ALENTO OVEST ALL. MENGA PETROLI DI CEGLIE MESSAPICA ALL. CPL CONCORDIA DI BOVA MARINA (RC) ALL. CPL CONCORDIA DI CONDOFURI (RC) ALL. CPL CONCORDIA DI MELITO P.TO SALVO ALL. CPL CONCORDIA DI MONTEBELLO JONICO ALL. CPL CONCORDIA DI PALIZZI (RC) ALL. COMUNE DI CAGGIANO (SA) ,01-0, ,86-0, ,46-0, ,02-0, ,16-0, ,70-0, ,34-0, ,31-0, ,06-0, ,08-0, ,98-0, ,07-0, ,02-0,09 RR_23 ALL. ENI R&M DI CAPONAGO ,01-0,10 RR_24 RR_25 ALL. METANO FANO S.R.L. DI PESARO (PU) ALL. 2^PRESA. COMUNE DI SETTIMO M.SE ,84-0, ,90-0,56 RR_26 ALL. SODIFA S.R.L. DI L'AQUILA ,32-0,33 RR_27 RR_28 RR_29 RR_30 RR_31 RR_32 RR_33 RR_34 RR_35 RR_36 RR_37 ALL.TO TOTAL TEMPA ROSSA DI GUARDIA PERT ALL. ENI S.P.A. DIVR&M DI CORREZZOLA (PD ALL.TO ENI R&M DI GIOVINAZZO DIR NORD ALL.TO ENI R&M DI GIOVINAZZO DIR SUD ALL.TO ITALGAS CITTADELLA REGIONALE CZ ALL.TO A2A RETI GAS -VIA MISSAGLIA (MI) ALL.TO ENI SPA DIV. R&M DI DESE (VE) ALL. EDISON GARAGUSO E MASSERIA MONACO ALL.TO VEBAD S.P.A. GIOIA DEL COLLE (BA) ALL.BUSSINELLO-COLOGNOLA AI COLLI ALL.TO DUSTY RENDERING SRL POLESINE PARM ,48-1, ,43-0, ,11-0, ,04-0, ,60-0, ,04-0, ,65-0, ,41-3, ,00-0, ,55-0, ,70-1,00 PROGRESS UNDER CONSTUCTION UNDER CONSTUCTION UNDER CONSTUCTION UNDER CONSTUCTION UNDER CONSTUCTION UNDER CONSTUCTION UNDER CONSTUCTION UNDER CONSTUCTION UNDER CONSTUCTION TEN-YEAR NETWORK DEVELOPMENT PLAN 91

92 PROJECT CODE RR_38 RR_39 RR_40 RR_41 RR_42 RR_43 RR_44 RR_45 RR_46 RR_47 RR_48 RR_49 RR_50 RR_51 RR_52 RR_53 RR_54 RR_55 RR_56 RR_57 RR_58 RR_59 RR_60 RR_61 RR_62 PROJECT DESCRIPTION ALL.TO SIMONETTI MARIO - MONTEGIORGIO FM ALL.TO PROGETTO GAS SRL CAMPIGLIA MARITT ALL.TO VAL DI CHIENTI CARB MALTIGNANO AP ALL.TO ENI SPA DIV. R&M MILANO C. GOBBA ALL.TO S.A.M. SRL DI COLLE VAL D'ELSA (S ALL.TO SIMONETTI MARIO DI FOLIGNO (PG) ALL.TO MARTINA GAS S.R.L. CHIETI ALL.TO BONATTI CO.MET.AM SORIANO C (VV) ALL. A.PALMIERI IN PIANA DI MONTE VERNA ALL.TO ENI S.P.A. COMUNE TURI (BA) ALL.TO ENERGIA PEROLI 2000 SRL DI TERNI ALL.TO CERAMICA DEL CONCA S. CLEMENTE RN ALL.TO LORO F.LLI SPA DI LONIGO (VI) ALL.TO ENI S.P.A. COMUNE BARONISSI (SA) ALL.TO SIRTAM DI PIETRASANTA (LU) ALL.TO C GALDIERI & F CASTEL SAN GIORGIO ALL.TO SIMONETTI MARIO PERUGIA ALL.TO ENI COMUNE DI BARI ALL.TO RAN SRL AVERSA (CE) ALL.TO MIRAVIVAI SOC AGRICOLA SS MIRA VE ALL.TO ENERGIE S.R.L. - CHATILLON (AO) ALL.TO LUNIKGAS SPA DI OSSAGO L. (LO) ALL. SC EVOLUTION SPA -COMUNE GERA LARIO ALL.TO PIZZAFERRI PETROLI SPA PARMA POT. MET. BOLTIERE - BERGAMO COMMISSIONING DATE DIAMETER KM CAPACITY PLANT [SCM/H] COST [M ] /NOT ,66-0, ,40-0, ,16-0, ,28-0, ,42-0, ,95-0, ,43-0, ,65-0, ,65-0, ,66-0, ,03-0, ,31-1, ,49-0, ,43-0, ,65-0, ,40-0, ,52-0, ,56-0, ,07-0, ,38-0, ,06-0, ,83-0, ,06-0, ,38-0, /300/200/100 8, ,87 RR_63 POT.DER. PER VARESE /300/250/200/150 8,19-12,36 RR_64 POT.DER. PER TREZZANO ROSA /150/100 2,26-2,07 RR_65 POT.DER. PER MOZZATE /150/100 2,08-0,94 RR_66 RR_67 RR_68 RR_69 RR_70 RR_71 RR_72 POT.DER.ARCO-RIVA DEL GARDA MET. MORNICO AL SERIO-TRAVAGLIATO POT.ALL.2^ PR.MISSAGLIA MET. LAINATE - OLGIATE OLONA METANODOTTO DESIO - BIASSONO POT. MET. RUBBIANO- COMO:TR. MUGGIO- DESIO ,32-4, ,84-24, /150 2,51-1, /250/200 14, , /400/200 6,56-7, , ,63 POT. ALL. SACCI E OPERE CONNESSE /100 4,80-4,76 PROGRESS UNDER CONSTUCTION UNDER CONSTUCTION UNDER CONSTUCTION UNDER CONSTUCTION UNDER CONSTUCTION UNDER CONSTUCTION 92 TEN-YEAR NETWORK DEVELOPMENT PLAN

93 PROJECT CODE RR_73 RR_74 PROJECT DESCRIPTION MET. S.ANDREA APOSTOLO D.I.-CAULONIA DIRAMAZIONE PER STILO E BIVONGI COMMISSIONING DATE DIAMETER KM CAPACITY PLANT [SCM/H] COST [M ] /NOT ,70-47, ,70-2,96 RR_75 POT. SPINA PER SALÒ (BS) ,00-2,60 RR_76 RR_77 RR_78 RR_79 RR_80 RR_81 RR_82 RR_83 RR_84 RR_85 RR_86 POT. ALL. COMUNE DI GAVIRATE 1A PR. POT. GAVI - PIETRALAVEZZARA MET. CERMENATE- VERTEMATE-CANTU' POT. ALL. COMUNI DI ALMÈ E VILLA D'ALMÈ POT. RETE IN COMUNE DI BRESSO (MI) POTENZ. RETE DI VAPRIO D'ADDA POT. ALL. CERAMICHE RAGNO DI SASSUOLO POT. I.R. N 158 DI CERNUSCO S/N (MI) POT. ALL. COMUNE DI LAINATE 1A PRESA POT. RETE RAVENNA FIUMI UNITI POT. ALL. 1A PRESA COMUNE DI LIVORNO ,27-0,30 NON NON , , /150 8, , ,02-0, ,09-0, ,35-3, ,03-0,10 NON /900 0, , ,60-1,10 NON /100 9,12-8, ,15-0,20 RR_87 POT. ALL. FIAT V.I. DI BRESCIA ,27-0,15 RR_88 RR_89 DERIVAZIONE PER MONTEBELLO J. E MELITO P POT. RETE ANZIO - NETTUNO (RM) NON NON ,12-64, ,84-8,07 RR_90 POT. SPINA DI POMEZIA (RM) /100 5, ,65 RR_91 RR_92 RR_93 RR_94 RR_95 POT. ALL. COM. DI TERNI 4A PR. MARATTA POT. DIRAMAZIONE SUD ROSETO POT. ALL. COM. DI IMOLA 1A PRESA POT. ALL. COM. DI S. LAZZARO 4A PRESA POT. ALL. COM. DI NOCETO 1A PRESA ,42-0,32 NON ,75-1, ,34-0, ,24-0, ,20-0,20 RR_96 POT. DER. PER MEDA (MI) ,30-0,93 RR_97 RR_98 RR_99 RR_100 RR_101 POT. ALL. COM. DI CAVARIA CON PREMEZZO POT. ALL. COM. DI LEGNANO 2A PRESA POT. IMP. DI REG. N 1007 DI BRIONA POT. ALL. COM. CORBETTA (MI) MET. CAZZANO SANT'ANDREA - CLUSONE ,01-0, ,01-0,10 NON NON NON NON NON , , ,29-0, ,00-12,00 RR_102 POT. ALL. COMUNE DI ARESE ,54-0,46 RR_103 RR_104 RR_105 RR_106 RR_107 RR_108 RR_109 RR_110 POT. ALL. 2A PRESA COMUNE DI SARONNO POT. IMP. RID. N 841 DI MESSINA POT. ALL. COM. DI FONTANELLATO 1A PRESA POT. DER. PINEROLO- VILLARPEROSA POT. DRIV. PER LODI 1 TRONCO (LO) POT. ALL. COMUNE DI SORISOLE (BG) POT.ALL.TI MORETTI E METALLURGICA S.GIOR DERIVAZIONE PER REZZATO 2 TRATTO ,03-0,10 NON NON NON , , ,32-0, ,10-14,90 NON ,31-1, ,31-0, ,13-0, /300 3,15-5,70 NON NON PROGRESS PLANNED PLANNED UNDER CONSTUCTION UNDER CONSTUCTION UNDER CONSTUCTION UNDER CONSTUCTION PLANNED PLANNED PLANNED PLANNED UNDER CONSTUCTION UNDER CONSTUCTION PLANNED PLANNED PLANNED PLANNED UNDER CONSTUCTION PLANNED PLANNED UNDER CONSTUCTION PLANNED PLANNED UNDER CONSTUCTION PLANNED UNDER CONSTUCTION PLANNED PLANNED PLANNED TEN-YEAR NETWORK DEVELOPMENT PLAN 93

94 PROJECT CODE RR_111 PROJECT DESCRIPTION POT. ALL. COMUNE DI BAREGGIO COMMISSIONING DATE DIAMETER KM CAPACITY PLANT [SCM/H] COST [M ] ,08-0,13 RR_112 POT. ALL. COM. DI VERGIATE ,11-0,11 RR_113 POT. ALL. COM. DI CERNUSCO SUL N. 3A PR. /NOT NON NON ,12-0,25 RR_114 POT. RETE DI CREMA ,86-2,33 RR_115 RR_116 RR_117 RR_118 RR_119 RR_120 MET. MONTORFANO - ALBAVILLA POT. ALIM. NORD MILANO E OPERE CONNESSE POT. ALL. COM. DI BERGAMO 2A PRESA POT. LECCO - MANDELLO TRA PIL 4.1 E 4.2 POT. ALL. ORI MARTIN DI BRESCIA POT. ALL. 1A PRESA COMUNE DI LEGNANO ,81-1, ,00-4,00 NON ,50-0, ,45-0, ,00-0, ,01-0,10 RR_121 POT. RETE DI DESIO ,57-0,36 RR_122 RR_123 RR_124 RR_125 RR_126 RR_127 RR_128 RR_129 RR_130 RR_131 RR_132 MET. CORNALETO - CASTELLEONE (CR) POT. ALL. COMUNE DI USMATE VELATE POT. ALL. BONELLI CHIMICA DI TREVIGLIO POT. ALL. COM. DI SAREZZO 3A PRESA (BS) POT. ALL. A2A MILANO TRIULZA POT.IMP.REG. N 637 VEZZANO LIGURE POT. DER. PER GORLA MINORE (VA) POT. IMP. RID. N 837/A DI PRIOLO G. DIRAMAZIONE PER GIOVINAZZO POT. ALL. COMUNE DI VALBREMBO (BG) POT. ALL. COMUNE DI MOZZO (BG) ,00-6, ,00-0, ,14-0, ,01-0,10 NON NON NON NON NON NON NON NON , , , , ,50-0,32 NON NON , , ,36-0, ,22-0,20 NON ,10-0,15 RR_133 POT. DER. PER CURNO (BG) ,30-0,92 RR_134 RR_135 RR_136 RR_137 RR_138 POT. DERIVAZIONE PER ODERZO COLLEG. PIETRAVAIRANO - PIGNATARO M. POT. ALL. AEM DEPOSITO MILANO "MM3" POTENZIAMENTO RETE VALLE OLONA POT. TRATTO VALLE CR 806 SPINA DI CORCHI ,90-3,72 NON NON , , ,11-0, ,33-0, ,02-0,10 RR_139 POT. ALL. COM. DI SCANDICCI ,00-0,10 RR_140 POT. ALL. 4A PRESA COMUNE DI TORINO ,10-1,20 NON NON NON NON NON PROGRESS PLANNED PLANNED UNDER CONSTUCTION PLANNED UNDER CONSTUCTION PLANNED PLANNED PLANNED PLANNED PLANNED PLANNED PLANNED PLANNED PLANNED PLANNED UNDER CONSTUCTION UNDER CONSTUCTION PLANNED PLANNED PLANNED PLANNED PLANNED PLANNED PLANNED PLANNED 94 TEN-YEAR NETWORK DEVELOPMENT PLAN

95 ANNEX 6: COORDINATION WITH OTHER OPERATORS In the following table are listed the contributions included in the plans received by other operators of national or regional networks, with remarks to eventual coordination activities with SRG. TABLE 33: LIST OF OTHER OPERATORS COMPANY INFRASTRUTTURE TRASPORTO GAS SOCIETÀ GASDOTTI ITALIA GP INFRASTRUTTURE TRASPORTO NETENERGY CMVTG RETRAGAS PROJECT PIOMBINO - ISOLA D'ELBA NO OVERLAP OVERLAP WITH SRG PROJECTS BUSSO - PALIANO NO OVERLAP NO ACTIONS CELLINO S. MARCO II SECTION NO OVERLAP SRG CONSEQUENT ACTIONS LOCALIZED ACTIONS BY SNAM RETE GAS FOR THE CREATION OF A NEW INTERCONNECTION POINT AT PIOMBINO ARE NEEDED. SNAM RETE GAS ENSURES THE EXECUTION OF INTERVENTIONS AFTER THE CONTRACTUAL COMMITMENTS AS PROVIDED BY NETWORK CODE (CAP. 6) NO ACTIONS LARINO CHIETI NO OVERLAP NO ACTIONS S. MARCO RECANATI COMPRESSOR STATION S. MARCO AREA NETWORK REGIONE SARDEGNA SMALLER PIPELINE PROJECTS NO EXPECTED PROJECT NO EXPECTED PROJECT BERBENNO - CHIURO NO OVERLAP NO OVERLAP SNAM RETE GAS PRESENTS THE GALSI PROJECT, WHILE SGI PRESENTS A PROJECT FOR THE METHANISATION OF THE ISLAND. BOTH PROJECTS ARE STILL AT A PRELIMINARY STAGE. THE TWO OPERATORS AGREE TO AVOID OVERLAP BETWEEN PROJECTS. FOR EXAMPLE, THE EVENTUAL REALIZATION OF THE GALSI PROJECT WILL REQUIRE TO REVIEW THE PROJECT ON THE SGI REGIONAL NETWORK OF SARDEGNA. SGI IS ALREADY TAKING INTO ACCOUNT THIS ASPECT IN THIS STAGE. NO OVERLAP NO OVERLAP NO OVERLAP NO OVERLAP LOCALIZED ACTIONS BY SNAM RETE GAS FOR THE CREATION OF A NEW INTERCONNECTION POINT AT RECANATI ARE NEEDED. SNAM RETE GAS ENSURES THE EXECUTION OF INTERVENTIONS AFTER THE CONTRACTUAL COMMITMENTS AS PROVIDED BY NETWORK CODE (CAP. 6) THE ACTIONS INDICATED FOR THE INTERCONNECTION OF THE S. MARCO - RECANATI ARE SUFFICIENT TO ENSURE THE OPERATION OF THE PLANT. NO IMMINENT ACTIONS NO ACTIONS NO ACTIONS NO ACTIONS NO ACTIONS CHIURO - TEGLIO NO OVERLAP NO ACTIONS TEGLIO - TIRANO NO OVERLAP NO ACTIONS TECHNOLOGICAL UPGRADING AND STRENGTHENING OF CITY GATE OF PASSIRANO (BS) UPGRADING MEASUREMENT SYSTEM OF VESTONE (BS) CITY- GATE CONNECTION CALCINATO- CASTENEDOLO (BS) NO OVERLAP NO OVERLAP NO OVERLAP HAS BEEN AGREED BETWEEN SNAM RETE GAS AND RETRAGAS A NEW UPDATED VALUE OF TRANSPORT CAPACITY AVAILABLE AT THE INTERCONNECTION POINT OF PASSIRANO, WHICH WILL BE IMPLEMENTED IN THE EXISTING AGREEMENT BETWEEN SNAM RETE GAS AND RETRAGAS, IN LINE WITH THE DEVELOPMENT PROGRAM OF RETRAGAS NO ACTIONS NO ACTIONS TEN-YEAR NETWORK DEVELOPMENT PLAN 95

96 COMPANY PROJECT OVERLAP WITH SRG PROJECTS SRG CONSEQUENT ACTIONS TECHNOLOGICAL UPGRADING AND STRENGTHENING IN VESTONE (BS) NO OVERLAP SNAM RETE GAS IS AVAILABLE TO ASSESS ANY IMPACT ON ITS OWN NETWORK ONCE THE PROJECT WILL BE APPROVED, ALSO IN RELATION TO THE STRENGTHENING OF THE INTERCONNECTION POINT OF BEDIZZOLE RETRAGAS METANODOTTO ALPINO CONNECTION CASTO - LODRINO (BS) TECHNOLOGICAL UPGRADING AND STRENGTHENING IN BEDIZZOLE (BS) HIGH PRESSION CONNECTION AT PIEVE DI BONO (TN) ENERGY EFFICIENCY PRIMARY PLANTS OF RETRAGAS UPGRADING OF GRID IN BRESCIA NEW CONNECTION PASSIRANO - BRESCIA TECHNOLOGICAL UPGRADING AND STRENGTHENING OF CITY GATE OF RODENGO SAIANO (BS) NEW HIGH PRESSION CONNECTION IN VALLE GIUDICARIE (TN) NEW GAS STORAGE OF BAGNOLO MELLA POSSIBLE INTERCONNESSION WITH FRENCH NATIONAL NETWORK POSSIBLE METANIZATION OF EXILLES, CHIOMONTE, GIAGLIONE, VENAUS AND NOVALESA (VAL SUSA) MEASURES TO IMPROVE THE SAFETY AND CONTINUITY OF SERVICE EXTRAORDINARY MAINTENANCE ON THE PIPE AS A RESULT OF SERVICE EMERGENCIES ACTIVITIES OF ENFORCEMENT OF CATHODIC PROTECTION EXTRAORDINARY MAINTENANCE OF REDUCTION STATIONS ACTIVITIES ON MEASUREMENT SYSTEMS AND REMOTE READING NO OVERLAP NO OVERLAP NO OVERLAP NO OVERLAP NO OVERLAP NO OVERLAP NO OVERLAP NO OVERLAP NO OVERLAP NO OVERLAP NO OVERLAP NO OVERLAP NO OVERLAP NO OVERLAP NO OVERLAP NO OVERLAP NO ACTIONS SNAM RETE GAS IS AVAILABLE TO ASSESS ANY IMPACT ON ITS OWN NETWORK ONCE THE PROJECT WILL BE APPROVED, ALSO IN RELATION TO THE STRENGTHENING OF THE INTERCONNECTION POINT OF VESTONE NO ACTIONS NO ACTIONS NO ACTIONS NO ACTIONS NO ACTIONS NECESSITY OF A NEW INTERCONNECTION POINT BETWEEN SNAM RETE GAS NETWORK AND RETRAGAS NETWORK IF THE EXTENSION PROJECT OF RETRAGAS NETWORK WILL PROVIDE A RING CLOSURE WITH A FURTHER FEED POINT FROM SNAM RETE GAS NETWORK. SNAM RETE GAS ENSURES THE EXECUTION OF THE CONTRACTUAL COMMITMENTS AS PROVIDED BY NETWORK CODE (CAP. 6) IF THE PROJECT WILL PROVIDE THE CONSTRUCTION OF A NEW INTERCONNECTION POINT WITH SNAM RETE GAS NETWORK, SNAM RETE GAS ENSURES THE EXECUTION OF THE CONTRACTUAL COMMITMENTS AS PROVIDED BY NETWORK CODE (CAP. 6) PROJECT WITH A LONG-TERM IMPLEMENTATION HORIZON. SNAM RETE GAS IS AVAILABLE TO ASSESS ANY IMPACT ON ITS OWN NETWORK ONCE THE PROJECT WILL HAVE MORE DEFINED CONNOTATIONS PROJECT WITH A LONG-TERM IMPLEMENTATION HORIZON. SNAM RETE GAS IS AVAILABLE TO ASSESS ANY IMPACT ON ITS OWN NETWORK ONCE THE PROJECT WILL HAVE MORE DEFINED CONNOTATIONS NO ACTIONS NO ACTIONS NO ACTIONS NO ACTIONS NO ACTIONS 96 TEN-YEAR NETWORK DEVELOPMENT PLAN

97 ANNEX 7: RESULTS OF ECONOMIC INDICATORS In the following tables are indicated the economic indicators of the projects listed in the Ten year development plan TABLE 33: NATIONAL NETWORK DEVELOPMENT PROJECTS PROJECT CODE RN_01 PROJECT DESCRIPTION SUPPORTO MERCATO NORD OVEST E FLUSSI BIDIREZIONALI TRANSFRONTALIERI NPV [M ] B/C IRR [%] RN_02 INTERCONNESSIONE CON SLOVENIA 11 3,1 19,2 SECURITY OF SUPPLY MARKET INTEGRATION 328 1,5 7,3 X X COMPETITIVITY SUSTAINABILITY' RN_03 LINEA ADRIATICA 354 1,3 6,2 X X RN_04 POTENZIAMENTI IMPORTAZIONI NORD EST 330 2,0 12,0 X X X RN_05 ULTERIORI POTENZIAMENTI A SUD ,7 1,9 X X RN_06 GALSI ,8 2,5 X X TABLE 34: REGIONAL NETWORK DEVELOPMENT PROJECTS PROJECT CODE PROJECT DESCRIPTION NPV [M ] B/C IRR [%] RR_62 POT. MET. BOLTIERE - BERGAMO 15,7 2,4 12 RR_63 POT.DER. PER VARESE 1,9 1,2 5 RR_64 POT.DER. PER TREZZANO ROSA 2,3 2,1 10 RR_65 POT.DER. PER MOZZATE 3,9 4,9 19 RR_66 POT.DER.ARCO-RIVA DEL GARDA 3,2 1,7 8 RR_67 MET. MORNICO AL SERIO-TRAVAGLIATO 41,5 2,7 12 RR_68 POT.ALL.2^ PR.MISSAGLIA 0,4 1,3 6 RR_69 MET. LAINATE - OLGIATE OLONA 3,7 1,2 6 RR_70 METANODOTTO DESIO - BIASSONO 11,5 2,6 13 RR_71 POT. MET. RUBBIANO-COMO:TR. MUGGIO-DESIO 31,9 7,7 25 RR_72 POT. ALL. SACCI E OPERE CONNESSE -2,8 0,4-1 RR_73 MET. S.ANDREA APOSTOLO D.I.-CAULONIA 2,2 1,0 4 RR_74 DIRAMAZIONE PER STILO E BIVONGI 5,7 3,3 17 RR_75 POT. SPINA PER SALÒ (BS) 5,7 3,3 16,7 RR_76 POT. ALL. COMUNE DI GAVIRATE 1A PR. 3,7 15,1 36 RR_77 POT. GAVI - PIETRALAVEZZARA 49,6 1,7 9 RR_78 MET. CERMENATE-VERTEMATE-CANTU' 4,5 1,6 8 RR_79 POT. ALL. COMUNI DI ALMÈ E VILLA D'ALMÈ 1,3 2,7 12 RR_80 POT. RETE IN COMUNE DI BRESSO (MI) 1,2 2,2 10 RR_81 POTENZ. RETE DI VAPRIO D'ADDA 34,5 42,6 10 RR_82 POT. ALL. CERAMICHE RAGNO DI SASSUOLO 5,9 65,6 58 RR_83 POT. I.R. N 158 DI CERNUSCO S/N (MI) 14,1 5,2 18 RR_84 POT. ALL. COMUNE DI LAINATE 1A PRESA 1,0 2,0 11 RR_85 POT. RETE RAVENNA FIUMI UNITI 6,1 1,7 9 RR_86 POT. ALL. 1A PRESA COMUNE DI LIVORNO 4,6 28,4 45 RR_87 POT. ALL. FIAT V.I. DI BRESCIA 10,1 71,4 59,1 RR_88 DERIVAZIONE PER MONTEBELLO J. E MELITO P 19,0 1,3 6 RR_89 POT. RETE ANZIO - NETTUNO (RM) 16,7 3,0 15 RR_90 POT. SPINA DI POMEZIA (RM) 0,6 1,1 4 RR_91 POT. ALL. COM. DI TERNI 4A PR. MARATTA 12,1 43,5 51 RR_92 POT. DIRAMAZIONE SUD ROSETO 11,3 9,2 28 RR_93 POT. ALL. COM. DI IMOLA 1A PRESA 15,0 60,3 56 RR_94 POT. ALL. COM. DI S. LAZZARO 4A PRESA 7,1 53,6 54 RR_95 POT. ALL. COM. DI NOCETO 1A PRESA 5,6 34,6 48 RR_96 POT. DER. PER MEDA (MI) 0,0 1,0 4 RR_97 POT. ALL. COM. DI CAVARIA CON PREMEZZO 3,9 46,1 53 RR_98 POT. ALL. COM. DI LEGNANO 2A PRESA 0,8 10,1 31 RR_99 POT. IMP. DI REG. N 1007 DI BRIONA 105,5 198,4 72 TEN-YEAR NETWORK DEVELOPMENT PLAN 97

98 PROJECT CODE PROJECT DESCRIPTION NPV [M ] B/C IRR [%] RR_100 POT. ALL. COM. CORBETTA (MI) 15,9 94,5 63 RR_101 MET. CAZZANO SANT'ANDREA - CLUSONE 0,7 1,1 5 RR_102 POT. ALL. COMUNE DI ARESE 7,8 16,6 34 RR_103 POT. ALL. 2A PRESA COMUNE DI SARONNO 3,9 46,3 53 RR_104 POT. IMP. RID. N 841 DI MESSINA 3,5 2,0 10 RR_105 POT. ALL. COM. DI FONTANELLATO 1A PRESA 0,4 2,2 12 RR_106 POT. DER. PINEROLO-VILLARPEROSA 5,1 1,4 7 RR_107 POT. DRIV. PER LODI 1 TRONCO (LO) 1,5 2,1 11 RR_108 POT. ALL. COMUNE DI SORISOLE (BG) 1,5 4,7 21 RR_109 POT.ALL.TI MORETTI E METALLURGICA S.GIOR 3,1 17,7 38 RR_110 DERIVAZIONE PER REZZATO 2 TRATTO 21,6 5,6 23 RR_111 POT. ALL. COMUNE DI BAREGGIO 4,3 37,2 49 RR_112 POT. ALL. COM. DI VERGIATE 16,6 181,5 74 RR_113 POT. ALL. COM. DI CERNUSCO SUL N. 3A PR. 20,7 80,6 55 RR_114 POT. RETE DI CREMA 0,4 1,2 5 RR_115 MET. MONTORFANO - ALBAVILLA 3,5 4,0 18 RR_116 POT. ALIM. NORD MILANO E OPERE CONNESSE 18,9 6,7 25,1 RR_117 POT. ALL. COM. DI BERGAMO 2A PRESA 10,4 25,5 42 RR_118 POT. LECCO - MANDELLO TRA PIL 4.1 E 4.2 2,2 8,3 28 RR_119 POT. ALL. ORI MARTIN DI BRESCIA 10,6 118,3 68 RR_120 POT. ALL. 1A PRESA COMUNE DI LEGNANO 22,3 261,6 81 RR_121 POT. RETE DI DESIO 1,5 5,4 23 RR_122 MET. CORNALETO - CASTELLEONE (CR) 5,6 2,0 11 RR_123 POT. ALL. COMUNE DI USMATE VELATE 1,4 16,9 38 RR_124 POT. ALL. BONELLI CHIMICA DI TREVIGLIO 2,7 16,3 37 RR_125 POT. ALL. COM. DI SAREZZO 3A PRESA (BS) 1,1 14,0 35 RR_126 POT. ALL. A2A MILANO TRIULZA 50,7 11,7 31 RR_127 POT.IMP.REG. N 637 VEZZANO LIGURE 31,2 35,3 48 RR_128 POT. DER. PER GORLA MINORE (VA) 1,3 5,3 22 RR_129 POT. IMP. RID. N 837/A DI PRIOLO G. 7,4 80,3 59 RR_130 DIRAMAZIONE PER GIOVINAZZO 23,6 53,0 241 RR_131 POT. ALL. COMUNE DI VALBREMBO (BG) 0,9 6,3 24 RR_132 POT. ALL. COMUNE DI MOZZO (BG) 1,9 13,9 35 RR_133 POT. DER. PER CURNO (BG) 11,4 15,5 36 RR_134 POT. DERIVAZIONE PER ODERZO 26,6 9,4 30 RR_135 COLLEG. PIETRAVAIRANO - PIGNATARO M. 41,8 2,3 12 RR_136 POT. ALL. AEM DEPOSITO MILANO "MM3" 0,9 6,5 25 RR_137 POTENZIAMENTO RETE VALLE OLONA 3,6 11,2 32 RR_138 POT. TRATTO VALLE CR 806 SPINA DI CORCHI 3,2 38,5 50 RR_139 POT. ALL. COM. DI SCANDICCI 6,3 66,8 58 RR_140 POT. ALL. 4A PRESA COMUNE DI TORINO 20,3 20, TEN-YEAR NETWORK DEVELOPMENT PLAN

99 Glossary Abbreviation AAEGSI ENTSOG ITGI MiSE PCI PLAN TAP TSO TYNDP SEN Definition National Regulatory Authority for Electricity, Gas and Water System European Network of Transmission System Operators for Gas Final Investment Decision Interconnector Turkey-Greece-Italy Italian Ministry of Economic Development Projects of common interest Ten-year plan to develop the Snam Rete Gas natural gas transmission network Trans-Adriatic Gas Pipeline Transmission system operator Ten Year Network Development Plan National Energy Strategy TEN-YEAR NETWORK DEVELOPMENT PLAN 99

100 By Snam Rete Gas Graphic Inarea Pre-Printing Engitel Printing Periskop Printed on ecological paper: Fedrigoni Symbol Freelife For information please contact Snam Rete Gas S.p.A Piazza Santa Barbara, San Donato Milanese (MI) Website: October 2016

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