Snam, Edison ink Italian small-scale LNG pact

Italian energy firm Snam and compatriot Edison are joining forces to further develop the small-scale liquefied natural gas (LNG) industry in the country.

In that regard, the two firms signed a memorandum of understanding to cooperate in the small-scale LNG sector to foster the decarbonization of land, sea and rail transport, as well as off-grid industrial and household users, according to a statement by Snam issued on Monday.

This initiative would leverage on the development of the Italian LNG sector, also thanks to planned new infrastructure investments, to encourage the progressive replacement of diesel and simultaneously boost the use of bio-LNG, Snam said.

Snam bought two FSRUs this year, one from Golar LNG and one from BW LNG. The firm also signed a deal in May to convert LNG carrier Golar Arctic into an FSRU.

Decarbonizing transport sector

Snam said in the statement that the two companies share the vision that LNG is “the most solid and effective energy vector to decarbonize large scale transport by reducing the environmental impact through diesel replacement.”

As of today, LNG market for heavy goods transport in Italy already accounts for approximately 4,000 trucks, around 130 filling stations and an annual consumption for about 200,000 tons, the statement said.

Thanks to small-scale infrastructure as well as the use of LNG in maritime bunkering, Snam expects the market to more than double by 2025 with a potential growth of up to 1.5 million tons in consumption by 2030.

With an increase in the usage market, the number of filling stations would grow to around 300 when fully operational.

Also, the development of the small-scale supply chain would also enable the progressive use of bio-LNG thus further contributing to the decarbonization plan announced by the EU with its Fit for 55 package, Snam said.

Entire small-scale chain

Under the agreement, which is not meant to be exclusive, the parties would identify and develop opportunities for collaboration along the entire small-scale LNG value chain, Snam said.

This includes truck loading services to road or ship transport, liquefaction and distribution via petrol stations or satellite depots.

Snam is active in the management and development of small-scale LNG infrastructure, including filling stations, while Edison, a unit of France’s EDF, and its partners have last year launched the new small-scale LNG terminal in the port of Ravenna.

Long-term collaboration

Snam’s CEO Stefano Venier said in the statement that this deal lays 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,” Venier 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 decarbonizing maritime as well as heavy goods transport,” Nicola Monti, CEO of Edison said.

“Through this agreement we can further boost the small-scale LNG market development as well as bio-LNG usage in Italy, thus maximizing our synergies with assets, projects and skills,” Monti said.

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