Reuters logo
UPDATE 2-Snam hikes investments as it looks to Europe
March 13, 2013 / 7:56 AM / 5 years ago

UPDATE 2-Snam hikes investments as it looks to Europe

* To invest 6.9 bln euros to 2016 vs 6.7 bln previous plan

* Sees 2013 dividend in line with 2012

* Aims to integrate Europe’s patchwork of gas grids (Adds detail, background on strategic aims)

MILAN/LONDON, March 13 (Reuters) - Italian gas grid operator Snam has increased planned investments to 2016 to upgrade its transport and storage network and position itself as a key European player.

In its first business plan since its divorce from oil major Eni, Snam said on Wednesday it would invest 6.9 billion euros ($9 billion) over the next four years, compared with 6.7 billion euros in the previous 2012-2015 plan.

The value of Snam’s regulated asset base will rise by an estimated 3.4 percent a year through 2016, it said, down from an average annual gain of 4 percent forecast in its 2012-2015 plan last year.

“The execution of this plan will be characterised by strict financial discipline, which will allow Snam to retain its solid capital structure and to confirm an attractive and sustainable dividend policy, despite the ongoing challenging macro-economic conditions,” Chief Executive Carlo Malacarne said in a statement.

Snam, which earns part of its money from a regulated return on investments, aims to help integrate Europe’s patchwork of gas grids as it strives to build out a network that will create a north-south gas corridor, it said.

The company said its announcement in February of exclusive talks to buy the TIGF gas network business of France’s Total is part of a strategy to tame surging energy prices at home by opening up new energy import routes into Italy.

A deal to buy France’s TIGF network would give Snam a platform from which to link the French and Iberian gas grids, which are awash with gas, and pipe that supply into Italy, Snam said.

Italian energy prices are among the highest in Europe and have been blamed for holding back economic growth and making industry uncompetitive.

Diversifying supplies away from Russia, Algeria, Libya and Qatar would give Italy access to cheaper sources of gas, reducing prices.

The Italian government is keen to beef up gas transport and storage infrastructure to help transform Italy into a southern European gas hub.

Last year Eni sold a controlling stake in Snam to state-controlled financing company Cassa Depositi e Prestiti, which also controls power grid operator Terna, to boost competition.

At around the same time, Snam and Belgian gas group Fluxys SA agreed to assess joint initiatives to develop gas infrastructure projects in Europe and create a north-south gas transit corridor.

“The financial commitment for the completion of the acquisition is expected to be around 600 million euros,” Snam said, adding other operations under consideration could require investments this year of 100 million euros.

Snam, one of Europe’s biggest gas transport groups, said its dividend per share for 2013 would be in line with last year.

$1 = 0.7680 euros Reporting by Stephen Jewkes and Oleg Vukmanovic; editing by Stephen Nisbet

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below