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CORPORATE MISSION AND VALUES

Snam is a European leader in the construction and integrated management of natural gas infrastructure. It favours the right conditions for fair energy costs by managing the gas system efficiently, developing infrastructure and providing integrated services for the market. It promotes the integration of the European networks, including through strategic partnerships with the biggest operators in the sector, along the main continental energy corridors.

Snam follows an ethical and socially responsible business model, capable of generating value for the Company and for the community in which it operates, with acknowledged professionalism and transparent dialogue with all its stakeholders, respecting the environment and the regions.

A clear and sustainable long-term development strategy, based on one of the most substantial investment programmes in Italian industry, has enabled the Company to attract Italian and foreign capital, boosting growth and employment.

With its 6,000 employees, Snam is active in natural gas transportation, storage, regasification and urban distribution. We manage a national transportation network that is more than 32,000 km long, including eight storage facilities, one regasification plant and a local distribution network that covers more than around 53,000 km in total.

Snam’s role in the gas system and its business segments

Snam conducts activities regulated by the gas segment and is a significant European operator in terms of regulatory asset base (RAB) in its sector.

As an integrated operator providing natural gas transportation, dispatching, storage and distribution services as well as LNG regasification services, Snam plays a leading role in the natural gas infrastructure system.

SNAM ACTIVITIES (Graphic)
Snam – GNL ITALIA (Logo)

REGASIFICATION

The process for the extraction of natural gas from the fields, its liquefaction for transportation by ship and subsequent regasification for use by the users, forms the ‘LNG chain’. The process begins in the country of the exporter, where the natural gas is brought to a liquid state by cooling it to -160°C and subsequently loaded onto tankers for shipping to the LNG regasification terminal. At the regasification terminal, the LNG is unloaded, then heated and returned to a gaseous state before being injected into the natural gas transportation network.

Natural gas is also injected into the national transportation network by the LNG terminal at Panigaglia (La Spezia), which is owned by the Snam subsidiary GNL Italia and is able to regasify 17,500 cubic metres of LNG per day; when operating at maximum capacity, the terminal can therefore inject over 3.5 billion cubic metres of natural gas a year into the transportation network.

The regasification service includes unloading the LNG from the vessel, operating storage, i.e. the storage time required for vaporising the LNG, regasifying it and injecting it into the national network.

Snam – RETE GAS (Logo)

TRANSPORTATION AND DISPATCHING

Natural gas transportation is an integrated service which involves providing transportation capacity and the actual transportation of the gas delivered to Snam Rete Gas to the entry points of the national gas transportation network1 up to the redelivery points of the regional network, where the gas is redelivered to the users of the service.

The natural gas introduced into the national network originates from imports and, to a lesser extent, national production. The gas from abroad is injected into the national network via eight entry points where the network joins up with the import methane pipelines (Tarvisio, Gorizia, Gries Pass, Mazara del Vallo and Gela) and with the LNG regasification terminals (Panigaglia, Cavarzere and Livorno).

Snam Rete Gas is the leading Italian natural gas transportation and dispatching operator, and owns almost all of the transportation infrastructures in Italy, with over 32,300 kilometres of high- and medium-pressure gas pipelines (approximately 94% of the entire transportation system).

Snam – ITALGAS (Logo)

STORAGE

Natural gas storage activities in Italy take place under a concession regime and serve to offset the various demands of gas provision and consumption. Supply has a basically constant profile throughout the year, while gas demand is characterised by high seasonal variability, with winter demand significantly higher than summer demand.

Storage also ensures that strategic quantities of gas are available to compensate for any lack of or reduction in non-EU supply or crises in the gas system.

Essentially, there are two distinct phases in storage: (i) the injection phase, generally concentrated between April and October, consisting of injecting into storage the natural gas from the national transportation network; and (ii) the extraction phase, usually concentrated between November and March of the following year, when the natural gas is extracted from the deposit, treated and redelivered to users by the transportation network.

The storage business makes use of an integrated group of infrastructure comprising deposits, wells, gas treatment plants, compression plants and the operational dispatching system.

Stogit is the major Italian operator and one of the leading European natural gas storage operators, via eight storage fields in Lombardy (four), Emilia-Romagna (three) and Abruzzo (one).

Snam – STOGIT (Logo)

DISTRIBUTION

The natural gas distribution business operates on a concession regime through the conferral of this service by local public entities; it consists of the service of gas distribution through local transportation networks from delivery points at the metering and reduction stations (city gates) to the gas distribution network redelivery points at the end users (households, businesses, etc.).

The gas distribution service is carried out for sales companies authorised to market to end users by the transportation of the gas through city networks.

Italgas undertakes natural gas distribution activities by making use of an integrated system of infrastructure, comprising stations for withdrawing gas from the transportation network, pressure reduction plants, local transportation and distribution network, user derivation plants and redelivery points comprising technical equipment featuring meters at the end users.

Italgas is the leading Italian natural gas distributor, with 1,435 municipal concessions and about 53,000 kilometres of medium- and low-pressure network.

1 The list of pipelines forming part of the national network and the related definition criteria are reported in the Decree of the Ministry of Industry, Commerce and Trade of 22 December 2000 as amended, based on the provisions of Legislative Decree 164 of 23 May 2000 (the “Letta Decree”).

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