Workshop Slovenian Gas Market in the Region Ljubljana, 12 th september 2018
Agenda 1. Snam at a glance 2. Italian natural gas transportation infrastructure 3. Network capacities 4. Natural gas transportation 5. Natural gas storage 6. Regasification
Agenda 1. Snam at a glance
Snam at a glance An integrated operator with a leadership position in all regulated gas businesses Snam S.p.A. Domestic Production Stoccaggio Transmission Network Trasporto e dispacciamento Industrial & Power generation Export Import LNG Regasification Rigassificazione Storage Residential Supply Infrastructure Sales 4
Snam at a glance Snam international development 100 % in IUK owned through a 24-76 JV with Fluxys 235 km subsea natural gas pipelines between Bacton (UK) and Zeebrugge (Belgium), 40 inches diameter 1 receiving terminal and compression station in Bacton 1 receiving terminal and 4 compressors in Zeebrugge 19.6% share in GCA 900 km transmission network 5 compression stations 84.47% share in TAG 1,140 km transmission network 5 compression stations 20.0% share in TAP 40.5% share in Teréga 5,000 km transmission network, 14% of France gas transmission grid Total storage capacity of around 5.7 bcm, ca. 20% of French capacity 15.5% participation in Prisma 880 km transmission network 66% share in DESFA Domestic pipelines LNG Terminals International assets
Agenda 2. Italian natural gas Infrastructures
Italian natural gas transportation infrastructure The gas transmission & storage infrastructures UPSTREAM NETWORK Gas Import 5 cross border Entry Points National Production 61 Entry Points to NTS Biomethane Production 2 Entry Points to NTS Lng Storage and Regasification 3 Plants Gas Export 3 cross border Exit Points Storage 12 Fields DOWNSTREAM NETWORK Re-delivery points ~ 7.000 Re-delivery Points Off-Take Areas 6 Areas 7
Agenda 3. Network capacities
Network capacities TY 2017/2018 capacities Firm and winter interruptible capacity [MScm/d] Entry capacity Exit Capacity TARVISIO 113 18 IP NORTH IP SOUTH PASSO GRIES 64,4 5 GORIZIA 4,8 4,4 MAZARA DEL VALLO 133 - GELA - PANIGAGLIA 13 - LNG TERMINALS CAVARZERE 26,4 - LIVORNO 15-9
Network capacities Reverse flow project Firm and winter interruptible capacity [MScm/d] IP NORTH Entry capacity TARVISIO 113 PASSO GRIES 64,4 Exit Capacity 40 GORIZIA 4,8 4,4 IP SOUTH MAZARA DEL VALLO 133 GELA - - PANIGAGLIA 13 - LNG TERMINALS CAVARZERE 26,4 - LIVORNO 15 - Transportation capacity: Capacity at the Exit Point of Passo Gries: 40 MSm3/d from 1 October 2018 (22 MSm3/d at Passo Gries and 18 MSm3/d as competing capacity at Passo Gries and Tarvisio) 10
Network capacities TAP Project Firm and winter interruptible capacity [MScm/d] IP NORTH Entry capacity TARVISIO 113 PASSO GRIES 64,4 Exit Capacity 40 GORIZIA 4,8 4,4 IP SOUTH MAZARA DEL VALLO 108 GELA - - MELENDUGNO (TAP) 25 - PANIGAGLIA 13 - LNG TERMINALS CAVARZERE 26,4 - LIVORNO 15-11
Agenda 4. Natural gas transportation
Natural gas transportation Long term Italian gas demand Domestic Power generation Industrial 2015 48% 32% 20% 2016 44% 33% 23% 2017 45% 35% 20% Gas demand increased in the last three years Among European countries, Italy is the one with the highest reliance on gas, which accounts for 35% primary energy consumption: national energy system is mainly based on gas and renewables, with oil still essential for transport Gas assumes a key role in the energy transition, especially in the coal phase out Italy is the third European market for gas consumption ( 72 bcm in 2017) 90 80 70 60 +9,1% +5,0% +2,2% Billion Smc 50 40 30 20 10 0 2014 2015 2016 2017 2020 2026 2030 Industrial Civil Power Generation SOURCE: ten-years network development plan of Snam 2017-2026 (high case scenario) 13
Natural gas transportation Booked capacity at importation points Multi - Annual Capacity 2016/2017 2017/2018 2018/2019 2019/2020 2020/2021 2021/2022 2022/2023 2023/2024 2024/2025 Tarvisio 95,8 105,2 90,2 10,6 10,0 - - - - Million smc Passo Gries 23,1 25,2 11,2 1,0 1,0 - - - - Gorizia - 0,1 - - - - - - - Mazara 83,8 89,4 89,8 - - - - - - Gela 23,2 18,5 19,8 10,9 10,9 10,9 10,9 10,9 10,9 The above values are the average of the capacity booked for the whole year The values for Thermal Year 2017/2018 are the average of the capacity booked until the 09/09/2018 Gorizia point is booked on a daily basis in case of particular market conditions 14
Natural gas transportation Italian gas market evolution From few Shippers with long-term contracts to more than one hundred Shippers making many gas exchanges and capacity transactions Look at the European gas market characterized by liquidity, flexibility and security of supply 250 Number of Shippers & Traders 200 150 100 50 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Shipper Shipper+Trader 15
Natural gas transportation Italian balancing system Starting October 2016, the balancing regime foreseen into Network Balancing Code (Regulation UE n. 312/2014) has been implemented in the Italian gas market. Shippers are responsible for their own balance position during the gas day through: 35 renomination cycles starting from 16.00 of gas day D-1 until 3.00 of gas day D at import, storage and redelivery point; Gas trade on organized market. Minimization of the actions made by the TSO for balancing the system (Residual role) through: Gas trade on organized market Trading platforms: MGAS Platform (MI MGP MGS) Locational Market Virtual Trading Point (PSV) Creation of Organized market, managed by trading platforms, in which the Market Operator (GME) is the counterparty Introduction of dual price for Shippers who have not balanced their positions at the end of the Gas Day: Selling price for Users that inject more gas than the gas withdrawal (long position) Purchase price for Users that withdraw more gas than the gas injected (short position) 16
Natural gas transportation Italian balancing system SRG vs GME SNAM RETE GAS Acts as a Balancing Responsible Acts as a Balancing Operator for the Network to be balanced Determines authorised Users that can have access to GME Platforms on the basis of: EPSU < MEPSU Guaranteed gas < gas in storage Provides Shippers the information that enables them to estimate their own balance position and how eventually fix any imbalance. GESTORE MERCATI ENERGETICI MGAS EXCHANGE Trend publication of the marginal puchase and sell price after any trade Allows only authorised Users to post trades on the platform Operates a forward physical market (MTE), a day-ahead auction market (MGP), an intraday auction market (MI) 17
Natural gas transportation European hub pricing 65 60 Burian 55 50 Baumgarten incident 45 /MWh 40 35 30 End of the Injection campaign 25 20 15 PSV TTF NBP CEGH NCG 18
Agenda 5. Natural gas storage
MScm/d Natural gas storage Underground storage Working gas - Thermal Year 2018/19 Strategic Storage: 4.620 MScm Modulation Service: 11.707 MScm (*) (*) It is the gas stocked until the 09/09/2018 20
Natural gas storage Stogit services Services Contract duration Type of User Allocation methodology Strategic Storage Annual / Infra annual Importer/Producer No allocation / Payment of a fee applied to the gas imported/produced Peak services Peak modulation Seasonal / Monthly Annual / Infra annual All Auction (marginal price or pay as bid) Transport network balancing Annual Network operators Equal to the request Flat services Hydrocarbon Annual Production concession holder Equal to the request Flat modulation Seasonal / Monthly Multi year / Annual / Infra annual All Auction (pay as bid) Fast cycle Annual All Auction (pay as bid) Short Term Capacity Monthly/Weekly/Daily All Auction 21
Natural gas storage Offered/booked services Thermal Year 2016/2017 Thermal Year 2017/2018 Thermal Year 2018/2019 Offered Booked Offered Booked Offered Booked 12.000 12.000 12.200 12.197 12.350 12.315 Mln of Scm * (*) 821 Mln of Smc already booked for TY 2019/2020 22
Natural gas storage Client Mix TY 2017-2018 Thermal Year 17/18 Thermal Year 18/19 Basic Services (76) Strategic service (61) Basic Services (70) Strategic service (55) (48) (39) 89 Shipper vs 86 Shipper 23
Agenda 6. Regasification
Regasification LNG Regasification Adriatic LNG Gravity Based Owner: Exxon, Qatar and Snam Entry into operation: 2009 Tanks capacities: 250.000 m 3 liq. Carrier: up to 152.000 m 3 li. Regasification capacity annual: 8 billion m 3 Partially regulated terminal (20%) e 80% in TPA exemption OLT FSRU Owner: Iren and Uniper Entry into operation: 2013 Tanks capacities: 137.500 m 3 liq Carrier: up to 180.000 m 3 liq Regasification capacity annual: 4 billion m 3 Regulated terminal GNL Italia - On-Shore Owner: Snam Entry into operation: 1972 Tanks capacities: 90.000 m 3 li Carrier: up to 70.000 m 3 liq Regasification capacity annual: 4 billion m 3 Regulated terminal 25
Regasification The regasification in Italy ENTRY NOMINATION=ALLOCATION (Del. 312/2016) 26
Regasification The regasification in Italy 350.000 300.000 250.000 200.000 MWh/d 150.000 100.000 50.000 0 Adriatic LNG OLT GNL Italia 350.000 300.000 250.000 200.000 MWh/d 150.000 100.000 50.000 0 27 Adriatic LNG OLT GNL Italia
Contacts Thank you for your attention! For any further information please contact: Alessandro Mora Email: alessandro.mora@snam.it Office phone number: +39 02 370 37915 28