Italy's Snam inks deal to develop LNG plants for transport, industry

FILE PHOTO: Italian gas group Snam logo is seen outside their office in Rome, Italy, June 4, 2020. REUTERS/Guglielmo Mangiapane

MILAN (Reuters) - Italy’s Snam signed a deal on Wednesday to develop liquefied natural gas plants to provide alternative fuel for transport and industry as part of its energy transition drive.

Europe’s biggest gas transporter said it had agreed with Italian industrial gas group SIAD to develop small- and medium-sized LNG plants for third parties on a global scale.

The new technology that will be used to liquefy natural gas and biogas will cut costs by up to 30% compared to traditional plants, the two companies said.

“With this deal, Snam enters liquefaction infrastructure, a sector that will be a key enabler for sustainable mobility by road, rail and potentially sea, and decarbonising other energy uses,” Snam CEO Marco Alvera said.

Snam, which makes most of its revenue from gas transport in Italy, has pledged to spend more on new green business lines to position itself for an industry-wide transition to cleaner energy.

The aim of the deal with SIAD is to help develop the supply chain for the use of LNG as fuel to power heavy transport like trucks as well as energy-intensive industries.

Some countries round the world are investing in LNG infrastructure, including fuelling stations along roads, as a way of cutting the use of polluting diesel fuel.

In Italy, the number of LNG-powered trucks has surged in the past 5 years to around 3,000 from 100 and filling stations are today around 90.

Snam said a first 50,000-ton-per-year pilot project would be launched this year in southern Italy, which it will operate.

Reporting by Stephen Jewkes; editing by Cristina Carlevaro, Valentina Za and Bernadette Baum