TAP's shareholder announces amount of investments for next 4 years

Europe's biggest gas grid operator, Snam, is expected to increase investments to boost its transport, storage, and LNG businesses in the next four years in a move to reinforce Italy's energy security, Report informs, citing Natural Gas World.

The state-controlled group, due to present its strategy on Jan. 19, played a key role in filling Italian gas stocks last year when the country was preparing for the winter with dwindling Russian supplies.

Analysts expect the company to ramp up investments to around 11 billion euros in the 2022-2026 period - from 8.1 billion in the previous plan - focusing on core business while reducing the emphasis on green hydrogen.

"Under the plan, Snam is expected to complete investments in two terminals for liquefied natural gas (LNG) and expand the country's gas storage. In addition, it aims to spend a total of 2.5 billion euros, of which 1 billion by 2026, to build a new pipeline in Italy. The pipeline is aimed at transporting more fuel to Italy's industrialized north and will allow reverse flows from Italy to northern Europe," said Davide Tabarelli, head of a think-tank Nomisma Energia.

"With the bulk of Russian supplies now replaced with African gas arriving in Sicily and the expectation of more fuel coming to Apulia through the Trans Adriatic Pipeline (TAP), Snam's move to boost the network is an obvious choice," Tabarelli said.

"Investments in LNG, storage, and the grid are urgently needed and will increase Snam's regulated revenue," he said. Nearly 90% of the group's 3.3-billion-euro revenue is currently coming from regulated activities.

Despite growing capital spending and debt worth 12.9 billion euros in end-November, analysts see Snam confirming its payout policy, with a dividend per share rising on average by 2.5% each year from 2023.

"The company might pursue a disposal strategy to ease pressure on its balance sheet this year," analysts at UBS said, adding Snam may sell some of its equity investments other than its 20% stake in TAP.