Stephen Jewkes and Giancarlo Navach in Milan - 26.05.2010
European gas demand will return to pre-crisis levels in 2013 and will then grow as power generation drives demand, offsetting any risk of gas oversupply after 2015, Snam Rete Gas Chief Executive said on Tuesday.
Italian gas demand -- which, as elesewhere in Europe, fell in 2009 as a consequence of the crisis -- will grow 3 percent in 2010 to around 80-81 billion cubic metres, Carlo Malacarne told the Reuters Global Energy Summit.
"There has been a strong increase in Italian demand in the first four months of this year with a 10-11 percent increase in the industrial sector and 12 percent in power generation," Malacarne said.
Gas demand in Italy will grow an average of 1.9 percent per year to 2020 but 2-3 percent in the next 3-4 years, he said.
Gas will have an important part to play in Italy's and Europe's power generation sector with coal and oil facing environmental headwinds and new nuclear power build focusing more on replacing aging capacity.
The Nabucco and South Stream gas pipeline projects are very important for European gas supply security and for Snam RG and at least one should be built in the mid-term, Malacarne said.
"I consider the possibility of having one new South Asia pipeline connecting Italy," he said. "I don't think oversupply will remain in place beyond 2015."
Snam, continental Europe's leading regulated gas operator by assets and keen to help develop Italy as a European gas hub, aims to increase gas flows from the south of Italy to the north and then on to central Europe.
"We have clients asking us to bring gas from Italy to central Europe which we can't automatically fulfil today," Malacarne said.
The GALSI pipeline, which will transport Algerian gas to central Italy, should go ahead. "The intention to press ahead with GALSI is very strong," he said, adding the final investment decision will be taken by end 2010 and the pipline will be operational in 2014.
"Strong gas connections with Russia and North Africa are strategic for Europe, crucial for security of supply," he said.
Of the five liquefied natural gas terminals currently in permitting phase, one or two will be developed in 2015-2016, he said.
ENI STAKE
Malacarne said he did not expect Eni to take any decision on cutting its 52 percent stake in Snam RG until 2011. "I think any final decision by Eni will not come before implementation of the EU directive (on liberalising energy markets) in March 2011," he said.
According to analysts a reduction of its stake in Snam could give Eni fire power to pursue profitable upstream growth while supporting its balance sheet and valuation.
Asked about pending legislation on gas distribution Malacarne said the government's idea was to stimulate consoldation of the sector by reducing the number of players and distribution areas.
Rules will be set to calculate the compensation an operator is entitled to should he lose a gas distribution concession. "The discussion under way is to fix the value to at least the RAB (regulated asset base)," Malacarne said.
About 90 percent of Italy's gas distribution concessions are due to expire in 2012. Source: Reuters: Balkans.com
Source: http://www.balkans.com/open-news.php?uniquenumber=58690
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