Ref. Ares(2023)5421182 - 04/08/2023
Mission to Rome, 15-16 March 2022
Report
ENER DG Ditte Juul Jørgensen, accompanied by
the
and a colleague representing the
Commission Delegation in Rome,
met the Italian Minister of Ecological
Transition, Roberto Cingolani, the representatives of the Energy Department at the Ministry of
Ecological Transition (previously Ministry of Economic Development), as well as ENI, Snam and
Edison, three important stakeholders of the energy policy panorama in Italy.
You will find below the main takeaways of the mission, divided per meeting.
Meeting with
at ENI - Rome, and
at ENI – Brussels Office
Storage
x Together with DE, IT has 52%-53% of EU storages
x 3 LNG (regasification) facilities, until recently functioning only as strategic reserves
x On 17/03, ENI and SNAM met the Ministry to decide the next steps: how to fill the
storages and be ready for next winter (expected to be very expensive)
x Storage of IT on 15/03 was 13%, supply is coming in regularly (1 bcm/day)
x Minister Cingolani issued a
Law Decree on storage on 15/03 x Early March, Cassa Depositi e Prestiti (CDP) made an
estimation about the cost of filling
the storages for IT for next winter under current prices: EUR 20.4 bln
Outreach to neighbourhood
x
Algeria
o Algeria has considerable gas resources
-
o ENI is the strongest player in Algeria, strong partnership
o Foreign Affairs Minister Di Maio and ENI CEO De Scalzi visited Algeria early
March
o Algeria is supplying gas via pipelines also to ES, which at the moment has lots of
LNG capacity. Instead of supplying to ES via pipelines, there is the possibility for a
swap, supplying more via pipelines to Italy and Spain via LNG
x
Qatar
o Qatar is honouring its long-term contracts,
x
Congo, Angola, M
ozambique could be included in strategic planning for IT supply of
next winter. Especially Mozambique could be the new Qatar in terms of potential.
x
Libya
o In 10 years, the volume of gas from Libya could triple
o
o Most of the domestic production in Libya stays there, as used to produce
electricity locally
o
o
x
Egypt
o Relevant quantities of gas discovered lately
o
o Egypt could provide additional quantity of gas but it would be tricky to do it by
summer 2022
o To consider its exponential demographic growth (125 mln people in 2030) and
the domestic needs it will face
¾ Diversification:
o ENI confirmed the space of maneuver to get an extra LNG regasification unit in
Italy (possibly floating)
o Cooperation between DE/IT to set a fixed price could help
o Need to rely on the most effective counterpart
US
DE government
For IT, ENI and Snam
o
o One regasification unit could be available in 3 months
o To connect to the grid would take too long (12/14/16 months)
¾ Permitting: Need to accelerate
¾ Scope to use ENI LNG terminal
o
Italy is now looking for LNG contracts
o Only Panigaglia: small vessel in ES to get complete use of Panigaglia terminal
o Other LNG terminal is in Rovigo (Adriatic),
Finding additional LNG is a challenge:
.
¾
EU gas price cap
x Need to understand how to implement it
x Disruption of gas and impossibility to replace it
x No fundamental rational behind this market functioning
x Taking billions of liquidity
x What should ne done in the current situation where the market is not working as a
market
o Cool down the market
o Look for alternatives
o When market is ready, it will be reopened again
Intervention possibilities in this emergency situation:
x Cap price EUR80/MGh
x Mid-term income is high enough
x Ensure SoS
x Develop potential partnerships:
o
Observatoire Méditerranéen de l’Énergie (OEME),
, and which has
as main contractor
o Interesting to explore how OEME could be used to bridge the 2 sides of the basin
Joint meeting with ENI
at ENI - Rome, and
of
at ENI – Brussels Office) and Snam (Marco Alverà, CEO,
at SNAM, and
Snam focused on the infrastructure
x Strong Snam infrastructure in the country
x Additional LNG regasifier in Piombino (Tuscany)
x In terms of pipelines:
o Need to develop a ES-IT interconnector (would allow an additional capacity of 5
bcm)
o Joint venture on pipes between Sicily and Algeria
o The pipes are high quality, they can tolerate 100% hydrogen flows
o Bottleneck is central Europe
ENI focused on molecules
x
x
The two stakeholders ask for a guarantee/legislation focusing on transactions to buy gas and
related price cap, when it comes to attract additional supply and lower insurance/hedging
costs against price volatility; this could be done at European level: they urge the creation of a
Working group at European level discussing molecules, trade and infrastructure.
Biogas
x Snam raised the recertification process: the key issue is ‘sandboxing’. They need
regulatory certainty, but flexibility to grow. It is now the moment to regulate this
process until 2030, where the market will be mature enough to be fully regulated to
prevent anti-competitive behaviours.
x IT is already using its maximum potential when it comes to biogas: for a plant, it takes 3-
4 years to deal with administrative aspects and 1 year to activate the plant
New oil and gas explorations (PiTESAI)
x It creates a conservative framework for new explorations
x 2.5 bcm of additional volume over a 10–15-year plan: too slow for the emergency
situation we are in. Need to face an emergency situation and use all tools available now.
Next steps: Possible future coordination on price cap mechanisms among IT, EL, AT, FR and ES.
In case of real disruption, there will be real need for joint procurement activities for
renting/buying new infrastructure; mechanisms to cool down the prices; financial support on
storage.
Meeting with Roberto Cingolani, Minister for Ecological Transition
x
Gas prices are the main problem today. Such a high gas price affects the electricity
prices, making electricity cost double than gas.
x
Taxation is the second biggest problem for businesses
(especially energy intensive ones)
x
China must be taken in consideration as a new player in the gas market, due to the
country’s transition from coal to gas.
x
On nuclear, push on 4th generation reactors and fusion, but ITER needs to be changed, current
functioning is not working, Change is feasible through governance, clear financial plan and
leadership.
Proposal from Minister Cingolani is to put an EU price cap in gas exchanges to prevent
transactions over a certain price. If Europe is setting the price in the market, it will play the
game as unified country and exchange gas in EUROs.
Renewables
x Need for
more PVs but permitting remains an issue:
o renewables potential
o streamlining permitting procedures for small energy communities
o liberalization programme to be adopted in the next future
o tackle the bottleneck: time
x
castor-oil will be the basis for diesel in 2023 (the plan is to penetrate 60% of transport
fuels with this oil by 2030);
x
reconversion of oil&gas industry and automotive industry – giving EU another top-
market priority
Energy efficiency: mobility and households (optimisation of the Superbonus)
PiTESAI: the
newly adopted guidance gives now clear rules on new explorations. Potential of
130 bcm in the Adriatic to be explored.
Meeting with representatives of the Ministry of Ecological Transition (previous Ministry of
Economic Development):
(a PowerPoint presentation was shared with the Commission)
x
Measures to tackle energy prices: support extended to businesses but too early to
assess the budgetary impact, since each new batch of measures is issued via Law
Decree, therefore it is subject of discussion in the Parliament.
x
Storage: Decree on storage allocation capacity adopted on 14/03. Regasification to
optimise the level of storage, incentives for gas filling, optimisation of the injection
phase (12 bcm to be injected / also possibility to inject higher pressure and therefore
higher amounts of gas).
Lack of European requirements for storage has been raised.
Concerning the possibility of a missed filling, the Ministry suggests a regulated approach
on storages at European level; monthly monitoring of storage situation. Explanation of
the notification of early warning as informative point and solidarity agreements signed
with SI and soon with DE.
x
New oil&gas explorations (PiTESAI): potential of increasing resources
x
Biomethane:
. Further delays would impair the
achievement of milestones set in the IT RRP. Therefore, the Ministry asked for support
and mediation in streamlining the process
.
x
Hydrogen: same bottleneck in the negotiations
. Ask for support in
streamlining the process – according to the RRP, by end of June 2022 need to sign
contracts with enterprises for production of electrolysers.
Meeting with Edison,
(via conference call), and
– Edison/IGI Poseidon.
Presentation of Edison, leading energy company in the Italian energy market (No 1 LNG
importer into Italy). Strong player on natural gas and hydrogen. Stakeholder involved in the East
Med pipeline project.
Presentation of the IGI Poseidon: consortium (Greek DEPA + Edison) managing the East Med
pipeline project (Israel/Cyprus/Greece/Italy pipeline connection), technical works are ongoing.
In April 2021, Israel and Greece sent a letter to Commissioner Simson asking for support of the
project being an alternative route for natural gas through the Balkans and Central Europe to
Italy. The project is part of the 5th PCI list.
Contact:
