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Italy's Snam eyes investments in Indian gas pipelines

IBEF:  August 20, 2020

Italy’s Snam, the operator of Europe’s largest natural gas transmission network, is planning to invest in the Indian gas pipeline business and has roped in GAIL’s former chairman B C Tripathi as its adviser.

The discussion took place between Snam top executives, the oil minister, officials, regulator, and industry executives in India, to understand the investment opportunities and regulatory landscape. It included various topics including hydrogen fuel, gas storage and small-scale liquefaction technologies but the company’s focus was on pursuing investment opportunities in the gas pipeline business.

Though, no official statement was released by any of the authorities involved.

On a response to question asked, Snam said, “We look forward to opening soon our office in India to enhance the dialogue and cooperation with Indian partners that we have developed over the past couple of years. For the time being we decline to comment further on specific projects until there are concrete developments.”

In July 2020, Snam, in consortium with five international investment funds, acquired 49 per cent stake in ADNOC Gas Pipelines in the UAE for US$ 10.1 billion.

Lats year, NITI Aayog had proposed keeping off GAIL’s pipeline assets and monetizing it but encountered resistance from the company as well as the petroleum ministry. GAIL owns about 11,000 km of gas pipelines across the country and is currently planning to shift all its pipeline assets to a wholly owned subsidiary.

Snam, which also operates in the UK, France, Austria, Greece, and China, plans to use its deep knowledge of the gas sector to launch itself in India. “Regarding India, the significant push towards cleaner energy shift and towards gas is what makes the country interesting for Snam. This will require infrastructures and an integrated management of those infrastructures, which is where Snam has 80 years of history and proven track record,” the company said.

It can offer technology and equipment for compressed natural gas (CNG) refuelling stations, the company said. “Snam is also working on an innovative modular approach to liquefaction that would enable liquefaction of gas at very competitive costs to foster city gas distribution and to monetize local stranded gas reserves,” it said.

It is seen that some of India's small gas fields are unconnected to a pipeline, and a cheap liquefaction facility can help evacuate such gas.

India is planning to expand the use of natural gas in transport and setting up new LNG regasification terminals. The country has given away more than 100 city gas distribution licenses in the past three years to increase population’s access to CNG.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.