Italy's Snam to invest to prepare gas grid for green fuels
MILAN, Oct 17 (Reuters) - Italian natural gas grid operator Snam sees a growing role for decarbonised gases and is getting ready to transport different substances, including biomethane and hydrogen, it said on Thursday.
Snam confirmed it would invest 14.5 billion euros ($15.8 billion) between 2028 and 2032 to support the energy transition, including repurposing its infrastructure.
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In its first transition plan, the state-controlled group said that the repurposing of its gas infrastructure to make it ready for hydrogen and carbon dioxide, is "technically feasible and cost effective".
This comes after a warning from environmental groups that gas and oil companies risk creating stranded assets by investing in new liquefied natural gas (LNG) capacity.
Snam is Europe's leading operator in gas transport, with a network of approximately 38,000 kilometres. It also has more than 17% of the total gas storage capacity in Europe and will reach a regasification potential of 18.5 billion cubic metres of gas next year.
"A risk assessment (run by the group) indicated that only 1% of pipelines may run the risk of being stranded by 2040, with this figure remaining under 10% by 2050," Snam said.
Among its transition efforts, Snam is promoting the setting up of a green hydrogen corridor to bring the fuel from Africa and southern Italy to northern Europe.
Under Snam's plan, between 60% and 70% of the current natural gas network would be repurposed to make it ready for green hydrogen.
The group is also working with Italian energy group Eni to develop a hub to store carbon dioxide in Italy.
In addition it is managing assets for the production of biomethane, which is the purified version of gas made from organic waste, and supporting green renovation of buildings through a unit called Renovit.
Snam confirmed its commitments to reach carbon neutrality on Scope 1 and 2 emissions by 2040 and net zero by 2050.
It aims at having a net positive impact on biodiversity by 2027 through landscape restoration activities where it builds infrastructure.
The group plans to increase the portion of sustainable finance to 85% of total by 2027 from 80% in 2023.
($1 = 0.9203 euros)
(Reporting by Francesca Landini, Editing by Keith Weir)