Adriatica gas pipeline, works begin in April: investments of 2.5 billion euros

In the coming weeks, construction work will begin on the Adriatica Line, which in terms of investments (2.5 billion) and additional transport capacity (an additional 10 billion cubic meters of gas each year), represents the most important Italian gas infrastructure project. transport over the last 10 years and has also been recognized by Brussels as a European project of common interest (PIC). Composed of the Sulmona compression station and 425 kilometers of new gas pipelines from Sulmona to Minerbio, in addition to a 268-kilometer section already in operation, the Adriatica Line will be completed by 2027 and is part of the interventions with which Snam is working to consolidate the energy security of the country and Europe, and being entirely designed to also allow the transport of hydrogen, it constitutes a “future-proof” asset, capable of also enabling the energy transition.

STRATEGIC WORK Italy is the second country in gas consumption in the entire European Union and, like almost all other member countries, depends approximately 95% on imports. The consolidation of the infrastructures that allow these supplies (gas pipelines, storage and regasifiers) is, therefore, essential for gas to reach industries, families, public bodies and vulnerable users without interruption, any day of the year. Gas transport infrastructures are essential in critical situations due to uncontrollable external factors. The most recent case is the Ukrainian crisis: in two years, flows from Moscow fell from 45% to 14% across Europe. The availability of multiple sources and supply channels made it possible to face it without exposing the country to the economic and social effects of a physical lack of supply. In this context, for example, an asset like TAP, considered by many to be a useless and obsolete project, has guaranteed the flow of energy needed by the country. The size of assets to store, regasify and transport gas must be such that it covers not the average daily demand but rather the “peaks”, which on days of intense cold would reach 400 million cubic meters. Having the necessary infrastructure to cope with this consumption means, on the most critical days, avoiding having to choose who can receive gas and who must do without it. The Pniec (Integrated National Energy and Climate Plan) forecast scenarios on the evolution of national gas demand, published in June 2023 by Mase, confirm the centrality of methane in the coming years as well. Even in the most rigorous scenario (the so-called “political”), in 2030 the annual demand for gas is estimated to be in line with that of 2023, close to 60 billion cubic meters. Of these, around one billion cubic meters could be supplied by hydrogen, around 6 by biomethane and more than 53 – again – by natural gas.

THE TRANSITION In addition to guaranteeing – already today – security of supply, infrastructures such as the Adriatica Line are designed and built to be able to accommodate gradually increasing quotas of decarbonized (or “green”) molecules such as biomethane and hydrogen, thus allowing energy production transition. It should not be forgotten that hydrogen has a third of the calorific value of natural gas and, to obtain the same effects as one cubic meter of gas, three meters of hydrogen are needed, which must therefore be stored and transported in much larger quantities ( triple the volumes) for which adequate infrastructure must be available. While waiting for these green molecules to be available in the necessary quantities, the role of the gas is also to function as a strategic backup for the electrical system: by depending on the growing renewable shares, in fact, the electrical system must be able to absorb the physiological intermittency from such sources. All without forgetting the progressive elimination of coal imposed by community and national regulations from 2025.

EUROPEAN INTERVENTION With the Russian-Ukrainian crisis, the predominant direction of gas flows reaching Italy is no longer from north to south, but from south to north, a trend that has imposed the need to overcome the current bottlenecks along this route: in the current import scenarios, transport capacity from south to north is effectively saturated. With the Adriatic Line, along this route, greater flows will be made available, up to 10 billion additional cubic meters per year, aimed at guaranteeing a safe supply to our country. It should also be noted that in these two years of crisis, trade flows to the north amounted to 7.2 billion cubic meters. The export capacity to Austria of the Tag gas pipeline (the Austrian gas pipeline connecting the Slovak border to the Italian border) is already reserved for the coming years with quotas between 80 and 92% for 2024 and 2025 and, to date, approximately half for 2026. Exports, therefore, are already increasing and also with a view to greater European solidarity they have contributed to alleviating dependence on Russian gas. Finally, it should not be forgotten that from next year the contracts for transiting Russian gas through Ukraine will also formally expire. Countries such as Hungary, Austria and Slovakia are still completely dependent on Russian gas flows through pipelines. That this trend can be confirmed is demonstrated by at least two recent examples: on March 19, Italy, Germany and Switzerland signed a gas solidarity pact, on the basis of which the three countries commit to providing mutual aid. in case of emergency, while last February Germany and Algeria, in turn, signed an agreement for the supply of gas. All these factors justify the recognition in the EU REPower Plan of phase 1 of the Adriatic Line and, in the long term, the inclusion of the SouthH2 Corridor (the southern corridor for hydrogen of which the Adriatic Line is an important part) in the list of European Hydrogen Projects. Common Interest (PCI).

COSTS FOR CITIZENS The economic commitments relating to the investments foreseen by Snam are reflected only in a minimal part in the bills paid by citizens: from the reprocessing of Arera data carried out by Snam, in fact, it appears that the tariff relating to gas transport costs – given the current prices – weighs less than 5% of the total bill. The first phase of the Adriatica Line, which includes the Sestino-Minerbio gas pipeline and the Sulmona compression station that will be completed by 2026, was included in the Pnrr review carried out with a REPowerEU Plan in mind, and is therefore recognized as eligible to receive 375 million of euros. To this is added the loan of 300 million euros guaranteed by Cassa Depositi e Prestiti in April 2023.

Source: IL Tempo