UPDATE 1-Snam considering capital increase to buy TAG pipeline
* Snam eager to start talks to buy TAG
* Main shareholder CDP bought TAG for 710 mln euros
* Snam 2013 net profit rises 17.7 pct, dividend yield 6.2 pct (Recasts lead, adds CEO comments, background)
MILAN, Feb 28 (Reuters) - Snam, a major European gas transport group, said it may launch a capital increase to acquire the TAG gas pipeline, which carries Russian gas into Italy, from its main shareholder Italian state lender Cassa Depositi e Prestiti(CDP)
Snam is looking to integrate Europe's patchwork of gas grids, in line with long-running government strategy to transform Italy into a southern European gas hub and help cut high energy prices. Last year it bought Total's gas transport and storage business and is also working on joint projects with Belgium's Fluxys.
"TAG is an asset that could be strategically interesting for Snam," Snam CEO Carlo Malacarne said in a conference call on 2013 results.
Malacarne said the group was considering a reserved cash call under which it would give CDP - which bought TAG in 2011 for around 710 million euros ($971 million) - a chunk of new shares in exchange for the pipeline.
"We intend to start with and speed up an evaluation of the acquisition of TAG... We are evaluating all options and could consider a capital increase dedicated to the CDP," Malacarne told analysts on the call.
Italy imports some 90 percent of its gas needs, with Russia currently accounting for more than 50 percent of daily flows. Snam's other investment plans include building reverse flow capacity in the north of the country to allow gas to be sent in both directions into Switzerland and Germany.
Earlier on Friday Snam said its net profit in 2013 rose 17.7 percent, in line with market expectations, boosted by lower financial expenses.
Snam - which has transport, storage and distribution businesses - said it would propose a dividend for the year of 0.25 euros per share, in line with the previous year. ($1 = 0.7309 euros) (Reporting by Stephen Jewkes; Editing by Sophie Walker)