Natural gas, natural gas supplier
 

THE NATURAL GAS MARKET

The legislation to privatise the market for gas (the "Letta" law) passed on 23 May 2000 opened up the Italian gas market in accordance with EU Directive 98/30/EC.
From 1 January 2003 all gas customers are free to choose their own supplier.
To better understand and explain this complicated market the term “gas chain” is used, which refers to the entire gas production cycle. This is made up of:

•    Supply/Production

•    Infrastructure (Transport/Storage/Distribution)

•    Sales


Supply/Production

Italy produces very little of the gas it consumes - less than 25%.
It has a total of about one hundred deposits, of which some 30 are off-shore. Gas supply is therefore guaranteed by companies with large quantities of capital which enter into contracts with big foreign gas producers and import gas over the national network and through pipelines built by Snam and other companies in the countries across which the gas travels. The main pipelines are:

•    The TENP pipeline, built in the early 70s as the German section of the pipeline network for importing Dutch
gas into Italy

•    TRANSITGAS, which carries gas mainly from Holland and Norway

•    TAG, the pipeline importing gas from Russia

•    SOTUGAT, in the Strait of Sicily, which brings in gas from Algeria

•    TMPC, named after the company that manages the Transmed pipeline, connecting one of the world's largest gas reserves in the Algerian desert with the Po Valley


In Italy there is only one liquefied natural gas (LNG) regasification terminal, situated in Panigaglia near La Spezia. Liquefied natural gas is unloaded from gas carriers and after vaporisation and compression is pumped into the Panigaglia - Cortemaggiore pipeline. A regasification terminal is being built in Rovigo.


Infrastructure (Transport/Storage/Distribution)

Transport
In the transport stage gas is carried from the production site (in Italy or abroad) or from storage depots to the local distribution network. This involves either using pipelines or ships to carry natural gas that has been liquefied and kept at a low temperature (LNG). Transport is divided into the primary network, which carries gas directly from production or import sites, and the secondary network which consists of the pipelines that connect the primary network to consumers.

Storage and Despatch
Storage and despatch are mainly carried out by the transportation company. Storage means the storage of gas that is excess to demand in special gas depots for use later on. Despatch means managing the transport and distribution network so that an appropriate balance is maintained between demand and supply. The pressure of the gas arriving from natural gas deposits or from storage depots is adjusted remotely, as is the flow of gas through certain sections of the network.

Distribution
Distribution is the last stage in the chain and is the one best known to end-customers, as before privatisation the local distributor was the only entity involved, managing sales and distribution of gas, managing the network, measuring consumption and ensuring transport safety.


Sales
The final stage in the chain involves selling the gas to end customers under the terms specified by the Regulatory Authority for Electricity and Gas or by tailoring energy offers to suit individual customers.