Snam and Edison to develop small-scale LNG market in Italy

Snam and Edison to develop small-scale LNG market in Italy

European natural gas transport and storage operator, Snam, and liquefied natural gas (LNG) import operator, Edison, on Monday, July 25, signed a Memorandum of Understanding (MoU) to develop the small-scale LNG market in Italy to foster the decarbonisation of land, sea and rail transport, as well as off-grid industrial and household users.

In a joint statement the firms said that the initiative will leverage on the development of the Italian liquefied natural gas sector and planned new infrastructure investments, to encourage the progressive replacement of diesel and simultaneously boost the use of liquid biomethane (Bio-LNG).

The two companies share the vision that LNG is the most solid and effective energy vector to decarbonise large scale transport by reducing the environmental impact through diesel replacement.

The LNG market for heavy goods transport in Italy already accounts for approximately 4,000 trucks, around 130 filling stations and an annual consumption of about 200,000 metric tonnes (mt).

With small-scale infrastructure as well as the use of LNG in maritime bunkering, the market is expected to more than double by 2025, with a potential growth of up to 1.5 million mt in consumption by 2030.

With an increase in the usage market, the number of filling stations is envisaged to grow to around 300 when fully operational. The development of the Small-Scale supply chain will also enable the progressive use of Bio-LNG, further contributing to the decarbonisation plan announced by the EU with its Fit for 55 package.

Stefano Venier, Snam CEO, said: “Through this agreement we lay the foundations for a long-term collaboration aimed at enhancing the value of Snam’s LNG system, also through the future development of new Small-Scale supply points.

“Our aim is to extend the infrastructure needed to speed up the replacement of higher-emission vehicles, particularly in heavy goods and sea transport, and to enable the increased use of biomethane, in line with the European targets of the RePowerEU plan as well as with our mission of supporting the decarbonisation path.”

Nicola Monti, CEO of Edison, said: “Last year, we launched the first integrated logistics supply chain on LNG in Italy, fully aware this vector will play a key role in decarbonising maritime as well as heavy goods transport.

“Through this agreement we can further boost SSLNG market development as well as Bio-LNG usage in Italy, thus maximising our synergies with assets, projects and skills; all elements Edison owns across the whole value chain.”

Small-Scale LNG (SSLNG) refers to all logistical activities with which small and medium quantities of liquefied natural gas (LNG) and Bio-LNG, are handled for the heavy goods, sea transport and off-grid users.

Under the agreement, which is not meant to be exclusive, the parties will identify and develop opportunities for collaboration along the entire SSLNG value chain – from truck loading services to road or ship transport, liquefaction and distribution via petrol stations or satellite depots – depending on their respective areas of expertise.

On the Biomethane/Bio-LNG front, the agreement envisages that the two groups identify opportunities for collaboration based on the portfolio of projects currently in place and that are being developed by the two partners, with reference to both the commodity produced and the development of assets.

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1st August 2022