Adriatic LNG terminal; Source: VTTI

With Dutch player bent on getting lion’s share, Snam ups its stake in Italy’s LNG terminal

In the aftermath of the deal VTTI, the Netherlands-headquartered energy infrastructure player, inked to get its hands on a majority stake in an Italian liquefied natural gas (LNG) terminal, Snam, Italy’s energy infrastructure operator, has taken the required step to boost its interest in the project.

Adriatic LNG terminal; Source: VTTI

VTTI signed an agreement to acquire 70% of Terminale GNL Adriatico – the company that owns the Adriatic LNG – after establishing a consortium with IKAV, a German asset management group, to get a hold of the majority ownership in the project. With the demand for LNG on the rise in Europe, the Dutch player sees Adriatic LNG as a long-term investment that gives it a strategic foothold in an important energy market.

“VTTI was given the opportunity to increase its shareholding in Adriatic LNG to 70%, which marks an important step in the company’s growth strategy. VTTI is making significant investments in LNG as part of its Strategy 2028, where the company aims to have at least 50% of its portfolio in transitional and clean energy infrastructure,” highlighted the firm in its statement.

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In response to the move made by VTTI, Snam exercised its pre-emption right to increase its stake in Terminale GNL Adriatico, enabling it to scale up its interest from the current 7.3% to 30% in Adriatic LNG regasification terminal operating in the waters off Porto Viro (Rovigo), Italy, The closing of the transaction is expected by the end of 2024 and is subject, among other things, to the necessary regulatory authorizations.

Stefano Venier, Snam’s CEO, commented: “This operation strengthens Snam’s presence in LNG infrastructure, which is increasingly strategic for the security and diversification of Italy’s energy supplies. We look forward to working together with VTTI to ensure continuous and world-class management of Adriatic LNG, which is fundamental for the Italian energy system, and to support its expansion projects.”

Upon closing of the transaction, the corporate capital of Adriatic LNG will be held by VTTI at 70% and Snam at 30%. Located about 15 kilometers off the Veneto coast, Adriatic LNG’s terminal is perceived to be Italy’s largest offshore infrastructure for unloading, storage, and regasification of LNG, with an annual technical regasification capacity of 9.6 billion cubic meters, corresponding to about 14% of the current domestic gas demand.

Currently, Snam holds stakes in all the remaining regulated LNG regasification plants operating in Italy with a total regasification capacity of about 23 billion cubic meters. This list encompasses the Panigaglia terminal, in operation since 1971 near La Spezia; the OLT FSRU Toscana off Livorno, operational since 2013; and the FSRU Golar Tundra, operating in Piombino since July 2023.

Following the Russia-Ukraine crisis, several initiatives were undertaken to diversify the country’s gas supplies. As a result, Snam acquired the FSRU BW Singapore. The unit will start activities off the coast of Ravenna in the first months of 2025.

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Thanks to this, Italy’s total regasification capacity will rise to 28 billion cubic meters, evenly distributed between the Tyrrhenian and Adriatic sides, corresponding to overall volumes imported via pipeline from Russia in 2021.