Natural gas storage

Results

Total revenue for the first half of 2015 amounted to €276 million, down by €11 million, or 3.8%, compared with the first half of 2014. Total revenue, net of components offset in costs¹³, amounted to €236 million, a reduction of €21 million, or 8.2%, compared with the corresponding period of the previous year.

Regulated revenue for the first half of 2015 (€276 million) comprised €241 million in fees for the natural gas storage service (-€6 million; 2.4%) and €35 million in fees charged back to users relating to the natural gas transportation service provided by Snam Rete Gas S.p.A. (+€9 million; 34.6%). Revenue from storage, net of components offset in costs, totalled €236 million, down by €7 million, or 2.9%, compared with the first half of 2014. This reduction was due to the different timing profile of the revenue over the course of the year compared with 2014, which moved from a seasonal to an essentially constant flow, due to the application of the provisions introduced by Resolutions 85/2014/R/gas and 295/2014/R/gas concerning the criteria for allocating storage capacity for the 2014-2015 thermal year by auction¹⁴.

Non-regulated revenue fell by €14 million compared with the first half of 2014 due to the expiry of additional storage fees in relation to the development of new storage capacity pursuant to Legislative Decree 130/10 (-€13 million).

EBIT for the first half of 2015 amounted to €169 million, down by €29 million, or 14.6%, compared with the first half of 2014. This fall was due mainly to lower revenue (-€21 million) and an increase in amortisation and depreciation (-€7 million), owing mainly to the entry into service of new infrastructure.

Operating review

Technical investments amounted to €62 million in the first half of 2015, down by €57 million (-47.9%) compared with the corresponding period of the previous year (€119 million).

Investments in the development of new fields (€23 million) related essentially to the activities carried out at the Bordolano field.

Investments in capacity upgrades (€24 million) related primarily to the drilling of wells at the Fiume Treste field, as well as to the acquisition of materials and the execution of works on the facilities for the Minerbio field.

Investments in maintenance (€15 million) related mainly to restoration work at the compression stations at Cortemaggiore and to recovering the efficiency of the compression stations at Fiume Treste.

Natural gas moved through the storage system

During the first half of 2015, natural gas moved through the storage system totalled 11.96 billion cubic metres, an increase of 2.45 billion cubic metres (25.8%) on the first half of 2014 (9.51 billion cubic metres). This increase was attributable mainly to higher withdrawals from storage (+2.44 billion cubic metres; +51.3%) as a result of the considerable usage of storage by operators during the first quarter of 2015.

The total storage capacity as at 30 June 2015, including strategic storage, was 15.9 billion cubic metres, of which 11.4 billion cubic metres related to available storage capacity, which was allocated in full for the 2015-2016 thermal year, and 4.5 billion cubic metres related to strategic storage (unchanged compared with the 2014-2015 thermal year).

Tariff regulations

Resolution 49/2015/R/gas – “Provisions for the allocation of storage capacity for the 2015-2016 thermal year for storage and definition of storage tariffs”

By means of this resolution, published on 13 February 2015, the Authority set forth the procedures for organising the auction process to allocate storage capacity for the 2015-2016 thermal year, and defined the methods for calculating the tariffs for storage services allocated in accordance with non-market criteria.

Resolution 51/2015/R/gas – “Approval of company storage service revenue for 2015”

By means of this resolution, published on 13 February 2015, the Authority provisionally approved the base revenue for the storage service for 2015. The provisionally approved revenue is intended to provide a reference figure to determine the fees for the allocation of storage capacity. The proposed definitive base revenue, as determined using the definitive annual increases in the balance sheet figures for 2014, the deadline for presentation of which was 31 May 2015, will be approved by the Authority within 60 days.

Resolution 182/2015/R/gas – “Regulatory mechanisms for asymmetric incentives for the development of additional national gas system storage point services, implementing Article 37, paragraph 3 of Decree-Law 133/2014”

By means of this resolution, published on 29 April 2015, the Authority defined the mechanism for incentivising new gas storage point capacity, as provided for by Decree-Law 133/2015 (the ‘Unlock Italy’ decree). Access to the mechanism is allowed for investments that are not made to fulfil legal obligations and in relation to minimum services guaranteed by the new capacity. The mechanism also provides for an incentive that differentiates between new and existing operators, as well as penalties in cases in which the actual services do not comply with minimum thresholds or are not made available by the 2021-2022 thermal year.

Applications for access to the mechanism must be submitted by storage operators by 30 September 2015.