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