SRG

Snam to invest 10 bln euros by 2026 in Italy's gas security

Credit: REUTERS/GUGLIELMO MANGIAPANE

By Francesca Landini

MILAN, Jan 19 (Reuters) - Europe's biggest gas grid operator Snam SRG.MI will invest 10 billion euros ($10.8 billion) by 2026 in boosting its transport, storage and LNG businesses to increase Italy's energy security and prepare the country for green fuels, it said on Thursday.

Presenting its 2022-2026 strategy, the state-controlled group said a 23% rise in investments compared with its previous plan would translate into 7% average annual growth in its core earnings in the period.

In the previous plan earnings before interest, taxes, depreciation and amortisation (EBITDA) were expected to grow by 4.5% per year.

Snam, which played a key role in filling Italy's gas storage facilities to prepare for the winter with dwindling Russian supplies, extended to 2026 a pledge to increase its dividend per share by at least 2.5% a year from 2023.

It said its net profit will grow by an average 3% each year from at least 1.13 billion euros expected for 2022.

The new strategy for the regulated company is the first under Chief Executive Stefano Venier, who took over from hydrogen advocate Marco Alvera last spring in the middle of the energy crisis.

"2022 was a watershed year for the global energy system," Venier said in a statement.

"Over the 2022-2026 plan period, we will significantly increase investments in order to strengthen our infrastructure and contribute to the country's greater energy security for the next few years and beyond."

Out of 10 billion euros of capital spending, 9 billion will be invested in gas infrastructure, and the remainder in the energy transition.

The main infrastructure projects are the construction of the so-called Adriatic pipeline to boost gas transport from the south to northern Italy, the setting up of two new liquefied natural gas (LNG) terminals, and the expansion of gas storage.

Net debt is expected to increase to around 18 billion euros in 2026.

($1 = 0.9259 euros)

(Reporting by Francesca Landini; Editing by Gianluca Semeraro and Jan Harvey)

((francesca.landini@thomsonreuters.com; +39 02 66129437; Reuters Messaging: reutersitaly.thomsonreuters@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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