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Natural Gas Consumption and Reserves in Italy
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By OilGasArticles Editor
Published on 03/17/2006
 
According to OGJ (1/1/05) , Italy has proven natural gas reserves of 8.0 trillion cubic feet (Tcf), the fourth-largest in the EU. In 2004, Eurostat reported that Italy produced 440 billion cubic feet (Bcf) of natural gas, a decrease of 7 percent from 2003 and an 11 decline percent from 1985.
Natural gas consumption has grown rapidly in Italy in the past decade.

According to OGJ (1/1/05) , Italy has proven natural gas reserves of 8.0 trillion cubic feet (Tcf), the fourth-largest in the EU. In 2004, Eurostat reported that Italy produced 440 billion cubic feet (Bcf) of natural gas, a decrease of 7 percent from 2003 and an 11 decline percent from 1985.

The country consumed 2.8 Tcf of natural gas in 2004, with consumption increasing at an average of 7.4 percent per year since 1985. An increase in the construction of combined-cycle, gas-fired turbines (CCGFT) has been the principle driving force behind the increase in natural gas consumption.

The maturation of Italy's natural gas fields and the rapid advance in domestic consumption have increased the country's reliance upon natural gas imports. According to Eurostat, Italy's natural gas imports supplied 84 poercent of the country's domestic consumption in 2004, versus 59 percent in 1985. The largest sources of these imports in 2004 were Algeria (38 percent), Russia (32 percent), and the Netherlands (14 percent).

Eni is the dominant actor in all aspects of the natural gas sector. The company controls almost all of Italy's natural gas production. An Eni subsidiary, Snam Rete Gas S.p.A. (Snam), owns and operates the domestic natural gas transportation system. Another Eni subsidiary, Stoccaggi Gas Italia S.p.A. (Stogit) manages most of the natural gas storage facilities in the country. Finally, Eni subsidiary Italgas controls one quarter of the retail gas distribution market.

Natural gas sector in Italy

Italy has mostly brought its natural gas sector into compliance with EU regulations concerning liberalization. These areas include: the opening of the sector to new entrants; the unbundling of production, distribution, and transmission activities; and the freeing of gas prices from state control.

Natural gas liberalization has slowly eroded Eni's dominant position in the sector, with Eni's share of total natural gas delivered to the national grid declining from almost 100 percent prior to liberalization to 68 percent in 2003. Besides Eni, the other major players in the Italian natural gas sector include Edison, majority-owned by Italian automaker Fiat and France's Electricite de France, and Enel, the fomer electricity monopoly.

There are also numerous, small companies in the retail distribution market that have arisen to challenge Italgas. One outstanding issue in Italy's liberalization plans is Eni's majority ownership of Snam; in 2005, the Italian government introduced legislation that would require Eni to reduce its holdings in Snam from 50 percent to 20 percent by 2007.

Source: Energy Information Administration