Outlook

Management’s priorities are to develop significant new gas infrastructure in Italy in order to improve supply security, flexibility and service quality throughout the gas system, which is necessary to create conditions for developing a gas hub.

Gas demand

Based on the latest forecasts, domestic gas demand is expected to grow by an average of approximately 2.6% per year for the four years from 2011 to 2014. This growth is driven by gas consumption in the thermoelectric sector, which is expected to increase by an annual average of around 5%.

Gas consumption is also expected to rise in the residential, services and industrial sectors, though at a slower pace.

Investments

Snam Rete Gas is going ahead with a significant investment plan involving a total of around €6.4 billion (net of expected contributions) in consolidated terms for the years 2011 to 2014. The main investment plan guidelines for the company’s business areas are as follows:

Transportation

  • satisfy requirements linked to medium-long term growth in demand for gas and increase the flexibility and safety of the gas transportation system in Italy;
  • continue to improve the quality of the transportation service.
  • contribute to the development of a European gas hub;

Over the period in question the planned investments should allow the company to extend the total length of the transportation network (31,680 km in 2010) by 4% and increase the installed power in the compression stations by around 8% (860 Megawatts in 2010).

Regasification

Investments in 2011 are expected to be in line with 2010.

Storage

  • improve the overall safety and flexibility of the system by increasing the storage and delivery point capacity;
  • optimise balancing and promote the liquidity of the gas system in Italy.

The projects included in the plan will deliver an increase in storage capacity of about 35% over the period in question
(9.2 billion standard cubic metres in 2010) and an increase of around 13% in peak capacity (271 million standard cubic metres in 2010).

Distribution

  • selectively manage the portfolio of concessions in order to maximise profitability;
  • continue to improve the level of safety, reliability and quality of the service;
  • continue to encourage the rising number of end users;

The planned interventions will allow the company to continue to support the development of the business by increasing the number of customers in 2014 by 8% compared to 2010 (5.9 million customers in 2010).

Efficiency

The 2010 important cost reduction achievements allow us to confirm our target of approximately €80 million of efficiency savings in 2012, in real terms, on the basis of 2008’s controllable fixed costs and at constant business structure.