ENI to sell part of Snam as part of gas restructuring
ENI SPA's directors have approved the restructuring of its Snam subsidiary and its storage business. Natural gas transmission activities will be transferred to a new company in 2001 to comply with EU and Italian decrees deregulating the gas sector.
ROME�ENI SPA's directors approved a project for the restructuring of its Snam gas subholding and its storage business.
Gas transmission will be transferred to a new company in 2001 to comply with EU and Italian decrees deregulating the gas sector.
Shares of the new company will be listed, and ENI could sell the majority share.
"We won't necessarily keep the control of the new company," said ENI's CEO Vittorio Mincato. He said that if the market offers enough money, ENI might give up its majority holding.
ENI's 29,000 km-system has 20 compression stations and 561 decompression stations. In 1999 the network carried 67.1 billion cu m of gas. ENI values the network at 10 billion euros.
ENI will also transfer its gas storage system, one of the largest in Europe, to a new company.
As a way of using its gas surplus, ENI is investing in the newly deregulated power generation business (OGJ Online, Oct. 19, 2000). ENI wants to buy a 30% share of the newly constituted Elettrogen consortium from ENEL SPA, the state electricity company.
If the government won't allow the purchase, ENI could refurbish the old power plants it has in petrochemical sites and build new ones. In Italy, ENI aims at a production capacity of 5,000-7,000 Mw said Mincato.
Abroad, ENI is concentrating on its core gas production business, with the objective of reaching 1.5 million boe by 2003.
It recently agreed to cooperate with Libya to build a gas pipeline from Zu�, near Tripoli in Libya, to Gela in southern Sicily. ENI will import 8 billion cu m/year to Italy, beginning in 2004. Half of that has been committed to Italian Edison. Another 2 billion cu m/year will go to Gaz de France, ENI announced on Nov. 16. The take-or-pay contract will last 24 years.
"With this contract," said Mincato, "we are completing the placement of the gas arriving from the fields which ENI is developing in Libya with its Libyan partner at an investment cost of $5.6 billion. We expect to complete the placement of the remaining 2 billion cu m by the end of the year."
"With this initiative," continued Mincato, "ENI will be giving a substantial boost to the opening up of the European gas market�a market in which ENI intends to play an increasingly important role. Our program is in fact to develop our gas activities abroad to substitute development in Italy, limited by the ceiling imposed by the [deregulation] decree."
ENI strategies also include new partnerships with other big European players.
In October, Snam, Gazprom, and three major European gas companies, Gaz de France SA, German Ruhrgas AG and Wintershall AG, signed an agreement to study and develop a project to link the Yamal-Europe pipeline, carrying Siberian gas, to Slovakia (OGJ Online, Oct. 19, 2000).