Operating review

Injections and withdrawals of gas in the transportation network

In 2015 a total of 67.25 billion cubic metres of gas was injected into the network, an increase of 5.00 billion cubic metres (+8.0%) compared with 2014.

Injections into the network from domestic production fields or their collection and treatment centres totalled 6.43 billion cubic metres, down by 0.46 billion cubic metres (-6.7%) compared with 2014.

The volume of gas injected by entry point totalled 60.82 billion cubic metres, an increase of 5.46 billion cubic metres (9.9%) on 2014. The increase was primarily attributable to higher volumes injected from the Tarvisio entry point (+3.76 billion cubic metres; +14.4%); from LNG regasification plants (+1.40 billion cubic metres; +31.2%), and especially from the Cavarzere entry point; from the Gela entry point (+0.60 billion cubic metres; +9.2%) and from the Mazara del Vallo entry point (+0.47 billion cubic metres; +6.9%). This increase was partially offset by the reduction in volume injected from Gries Pass (-0.80 billion cubic metres; -7.0%).

NATURAL GAS INJECTED INTO THE NETWORK BY IMPORT POINT (% of total gas injected)

The natural gas withdrawn from the National Transportation Network in 2015 (66.94 billion cubic metres) was mainly for: (i) redelivery to users at network exit points (66.46 billion cubic metres; +9.0%); (ii) exports and transit (0.27 billion cubic metres); and (iii) consumption by the compression stations and gas emissions from the network and from Snam Rete Gas plants (0.18 billion cubic metres).

The transportation capacity of the network again covered all user demand in 2015. Average transportation capacity provided in 2015 was 371.6 million cubic metres on average per day. In addition to the aforementioned capacities, which concern the entry points interconnected with foreign countries and the LNG terminals, a transportation capacity totalling 29.6 million cubic metres on average per day is available at the domestic production entry points.

TRANSPORTATION CAPACITY AND SATURATION

An average of over 370 million cubic metres of transportation capacity was made available to customers daily at network entry points during the year. Access to the service was provided to all operators.

In 2015, there was an increase in both the number of customers (from 134 to 139; +3.7%) and the number of connection agreements for the creation of new delivery/redelivery points or the upgrading of existing points (65 compared with 45 for an increase of about 44%).

Furthermore, for the development of greater market liquidity, based on the new rules, operators may carry out gas exchanges by acquiring transportation capacity not only over an annual or multi-year time scale, but also on a daily or intra-daily basis, thereby increasing transaction frequency.

In order to manage exchanges among operators and relationships with them, over time Snam has developed IT systems and web portals that now represent a unique feature of the company that is regularly upgraded.

During the year, the following developments took place:

• as of 1 November 2015, at network entry/exit points connected with EU Member States and with Switzerland, gas system users may reserve intra-day transportation capacity by auction procedures arranged by the PRISMA platform following the timing in the shared European calendar published by ENTSOG;
• since February 2015, Snam Rete Gas has gradually provided users with the Logistica Gas application, a new IT platform to manage commercial processes of daily scheduling, allocation and provisional and final financial statements. The new platform also manages the megawatt hour (MWh), the new unit of measure employed instead of gigajoules (GJ), and it can also manage, as soon as the Authority arranges its starting date, the intra-day rescheduling process that will allow users to balance their balancing positions and to fully exploit the potential transfer of intra-day capacity as soon as the regulatory framework for balancing is completed;
• as of 1 October 2015, the Virtual exchange point (VEP) application was adapted to allow market operators to deliver to the Italian VEP gas futures contracts entered into at a third-party exchange, thereby expanding the supply of derivative products and making the Italian market more liquid and integrated with European markets.

These innovations are a part of the project shared at the European level to harmonise rules of various gas systems with the aim of promoting a single European market.

The process of determining all transportation capacities has been ISO 9001 certified since 2011. This certification was confirmed during the year.

In this regard, a project is under way aimed at obtaining ISO 9001 certification for all processes related to transportation activities managed by Snam Rete Gas.

Network codes list a number of indicators for monitoring the quality of service offered by the companies. Snam companies continued to maintain excellent performance with respect to these indicators in 2015, some of which, relating to specific levels of commercial quality, lead to the automatic compensation of customers if service quality standards are not met.

Organisational changes related to operational activities

At 31 December 2015 there were 1,918 employees in service in the transportation segment, an increase of 44 employees compared with 31 December 2014.

In 2015 in the area of transportation activities, the Group took measures to consolidate the organisational structure, and especially operating mechanisms to promote the optimisation of various processes in the area of Operations and Commercial Development. These measures included:

• the continuing development of the new IT solution for managing the commercial processes of gas scheduling and balancing, in line with the new requirements imposed by the constant changes in the regulatory and business scenario;
• in the Operations area: (i) enhancement of the unit dedicated to technical activities through the establishment of a unit dedicated to maintenance investments; (ii) enhancement of centralised coordination activities related to compression stations; (iii) continuation of the activities of the SmartGas project aimed at amending regulations and standards for pipeline and plant maintenance, the development of professional positions in local areas and the development and implementation of more advanced IT solutions for managing operating processes;
• optimisation of the internal unit dedicated to procurement, with the creation of a unit for purchasing operating services and another unit focused on staff and ICT services.

Accidents

In 2015, the number of accidents dropped significantly for both employees and contract workers, although unfortunately one employee was involved in a fatal accident.

Energy consumption and emissions

In order to limit natural gas emissions from the transportation network, measures continued to recover gas through on-line gas recompression interventions in the network upgrading phase and in compression stations (3.6 million cubic metres of natural gas was recovered, equal to around 63,600 tonnes of CO₂eq) and to replace pneumatic equipment in certain plants.

In 2015 a new low-emission turbine (DLE) entered into service at the Enna compression station (TC3).

In 2015, nitrous oxide emissions totalled 225 tonnes (-5.1% compared with 2014). The decrease was due to the increasingly widespread use of DLE turbines that were used for 88% of operating hours. This reduction is even more significant given that the gas fuel used to operate the gas turbines, which is responsible for the largest share of emissions, was up by +4.6%.