San Potito & Cotignola
Underground Natural Gas Storage Development
Case History
Senio river crossing the Cotignola area
Valentina Infante
Storage and Transmission Commercial Manager
Edison Stoccaggio
AGENDA
The company
The National Storage Market
The S.Potito and Cotignola Project
Conclusions
Edison Stoccaggio
OMC 2007 - 29 marzo 2007
2
The Company – History
Edison Stoccaggio SpA, founded
Transmission company.
in August 2004, is the Edison’s group Gas Storage and
Edison Stoccaggio has an historical experience in gas infrastructure development and operation.
Some Key dates:
•1962, laying first pipeline.
•1984 first storage concession
•1994 second storage concession
•2000 “Letta decree” stated gas transmission and storage legal unbundling
•2001(30 November) Edison T&S was founded
•2004 Edison Stoccaggio founded by unbundling of gas storage activity and Cavarzere-Minerbio
project from Edison T&S
•September 2004 Edison T&S (now SGI S.p.A.) sold to the private equity fund Clessidra sgr
Edison Stoccaggio is the only storage and transmission operator in Italy and is strongly involved in
gas storage and national grid transportation capacity development.
Edison Stoccaggio
OMC 2007 - 29 marzo 2007
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The Company – Gas Storage business
Edison Stoccaggio owns and operate 2
storage fields still under development:
Operated Fields
Bolzano
COLLALTO
Sondrio
Belluno
Pordenone
Trento
New fields
Cellino
Collalto
Udine
Aosta
Como Bergamo
Treviso
Brescia
Milano
Novara
Vicenza
Trieste
Verona
Venezia
Padova
Torino
Pavia
Asti
Even if not yet at regime, Edison
Stoccaggio since year 2001-2002 is
offering storage services and increasing
capacities.
During this period Working Gas was
almost doubled: from 0.27Bcm to
0.4Bcm (+45%) and number of users
increased from 1 to 10.
CremonaMantova
Piacenza
Rovigo
Parma
Alessandria
Ferrara
Modena
Cuneo
Savona
Bologna
Genova
Ravenna
Forli
La Spezia
Imperia
Mar Ligure
San Potito
Pesaro
Lucca
Cotignola
Pisa
R.S.M.
Firenze
Ancona
Arezzo
Livorno
Siena
Macerata
Perugia
CELLINO
Grosseto
I.Elba
Terni
Viterbo
L'Aquila
ROMA
I.Asinara
Edison Stoccaggio
Mar Tirreno
Pescara
Rieti
I.Giglio
I.Maddalena
I.Caprera
located in Abruzzo
located in Veneto.
Frosinone
I.Tremiti
Campobasso
Foggia
Latina
Benevento
0
150 km
Bari
In the next 7/8 years Edison S. will
increase the working gas from 0.4Bcm
to 2.7 Bcm and the maximum
withdrawal peak rate from 3,2 Mcm/day
to 26.5 Mcm/day.
OMC 2007 - 29 marzo 2007
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The Company – Gas transmission business
STAZIONE DI RIDUZIONE
E MISURA CAVARZERE
PIATTAFORMA
LNG
Edison Stoccaggio, as gas transmission company, is laying
the Cavarzere-Minerbio pipeline. The 36’’ pipeline, 83 km
long, will connect the off-shore Adriatic LNG Terminal near
Rovigo to Snam Rete Gas national grid.
The Terminal has a regassification capacity of 8 Bcm/year
SEA LINE
30”
STAZIONE
RIDUZIONE
E MISURA EDISON
SPIAGGIAM.TO
GAS
PORTO VIRO
36”
CENTRALE
SNAM
MINERBIO
METANODOTTO
PORTO VIRO - CAVARZERE - MINERBIO
Gasdotto Cavarzere Minerbio
Since 2004, is supporting Edison in the management of
S.G.I. (Società Gasdotti Italia S.p.A.), the second
transmission operator in Italy (owned by Clessidra till last
February).
Rete Gasdotti Gestita da Edison
Edison Stoccaggio
OMC 2007 - 29 marzo 2007
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The Company – Market Positioning
 Italian Storage system includes 2 SSO’s:
 100% Owned by ENI
 8 Storage fields
– Stoccaggi Gas
Italia S.p.A.
– (Stogit)
 97% of the Italian Storage Capacities
• WG=13.5 Bcm (5.08 for Strategic purposes)
• Max Injection Capacity= 130 Mcm/day
• withdrawal Capacity (at the end of withdrawal period) = 150 Mcm/day
 100% owned by Edison
 2 Storage fields
– Edison
Stoccaggio
S.p.A.
Edison Stoccaggio
 3% of the Italian Storage capacities
• WG=0.4 Bcm (0.02 for Strategic purposes)
• Max Injection Capacity= 2.8 Mcm/day
• withdrawal Capacity (at the end of withdrawal period) = 2.2 Mcm/day
OMC 2007 - 29 marzo 2007
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The National Storage Market
In the Current Italian Gas market, storage has an important role:
•Storages were developed to match the residential market and the transmission physical
balance needs
•New import infrastructures still not in place, increasing the dependency of the Italian gas
system from storages
•With the liberalization process, started in 2000, the new regulation and the increase in the
gas market demand, Storage capacity became short. Estimated lack of capacity:
Space
4 Bcm
withdrawal capacity
75Mcm/day (at the end of winter)
demand includes: strategic, production, pipeline balancing, domestic and industrial needs
•New needs are coming from the opening European energy market (power generation
prices dynamics and gas trading opportunities)
Edison Stoccaggio
OMC 2007 - 29 marzo 2007
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The National Storage Market
At the same time, currently Italy:
•doesn't have a spot market (no price signal are available)
•Has a monopoly “de facto” in storage business (Stogit owns 97% of the storage capacity)
•Has a rTPA
•Would like to become a European HUB
•Has a Storage activity fully regulated by national authorities (Ministry and AEEG)
New Storages have to be developed
regulatory framework plays a really important role
Edison Stoccaggio
OMC 2007 - 29 marzo 2007
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S. Potito and Cotignola Project – How did it go
March 2001: 6 New fields were tendered by the Ministry
BUT:
D.M. 26 September 2001 combined with Ordinance 26/2002 were creating this scenario
No guarantee on remuneration for New comers in storage activity (competitiveness on tariffs)
•Level of remuneration was too low
•No higher penalties for usage of strategic storage for user that didn’t ask for Edison Stoccaggio
capacities
•No rules were in place for obtaining the concession for new storage fields
On the other hand:
•Lack of capacity was in place
•opportunity for Edison to offer customized services
•D.M. 29 November 2002: defines governmental contributions for Studies and experimental
operations addressed to recognize new opportunities to improve Italian storage system capability
Edison Stoccaggio continued investing on existing storage fields and decided to bid
(with only few other operators) for new storages field
Edison Stoccaggio
OMC 2007 - 29 marzo 2007
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S. Potito and Cotignola Project – The Italian Bid
March 2001: 6 new natural gas
depleted reservoir were tendered, 7
bidders
Sept. 2002 Edison submitted:
Cornegliano
•2 separated projects for San Potito
and Cotignola fields
San Potito & Cotignola
Ravenna Terra
•an integrated development project,
of both gas storages, having the
purpose
to
optimise
the
performance/Capex ratio and to
minimize environmental impact.
EDISON
STOGIT
Existing Storages
1
Cortemaggiore
2
Sergnano
3
Brugherio
4
Ripalta
5
Minerbio
6
Fiume Treste
7
Sabbioncello
8
Settala
9
Cellino
10
Collalto
Cugno le Macine &
Serra Pizzuta
•Other 4 bidders for the same fields
Only 5 fields were awarded.
December
2004:
Edison
Stoccaggio integrated project was
selected by the Ministry
Other storage reservoirs for
bidding
Edison Operating Storages
Stogit storages
Edison Stoccaggio
OMC 2007 - 29 marzo 2007
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S. Potito and Cotignola Project – The Project
SAN POTITO STORAGE PLANT
Conversion of a Depleted Gas Layer into Storage
Redrilling & Workover of 5 wells from a unique cluster
Compression and treatment facilities realization
Working Gas: 345 Millions Scm
Cushion Gas: 155 Millions Scm
COTIGNOLA STORAGE PLANT
Conversion of two depleted gas
layers with two well clusters
Drilling of 10 wells
Flow lines from Cotignola clusters
to San Potito (6 km)
Working Gas: 570 Millions Scm
Cushion Gas: 290 Millions Scm
Total Working Gas 915 MScm;
Edison Stoccaggio
MAX peak rate of 7,5 MScm/day
OMC 2007 - 29 marzo 2007
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S. Potito and Cotignola Project – What happen in the mean time
Regulatory framework (2/3)
•Law 239/2004 (August 2004 “Marzano Decree”) defines TPA exemption for new infrastructure (or for increased
capacity of existing infrastructure).
investors will be entitled to have exemption for at least 80% of the new capacity and at least a period of 20 years,
based on a “case by case” approach
•D.M. 26 August 2005: defines the procedure to award the concession, the duration, the extension period and the
storage operation modalities
•December 2005 Edison Stoccaggio signed an agreement with Blugas Infrastrutture for the joined development &
exploitation and started the authorization process (is in progress about EIA, Concession assignment and the
Public Utility for the related facilities).
•Winter 2004-2005 and 2005-2006: Storage lack of capacity became critical and evident
•Ordinance 50 march 2006 defines:
•a national tariff with a compensation mechanism for revenue guarantee (even if with a high
delay on cash flows for new comers)
•A higher level of remuneration for new investments (11.1% for 8 or 16 years)
•No revenue cap on the revenue coming from the commodity
Now the regulatory framework is more suitable for new investments in storage fields: a
huge investment plan is approved by Edison Stoccaggio (approx. 600M€): increase
existing capacity by 2.3Bcm of Working Gas and 24 MScm/day in the next 8 years
Edison Stoccaggio
OMC 2007 - 29 marzo 2007
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S. Potito and Cotignola Project – Where we are
Jenuary 2002
Data Room
Regulatory framework (2/3)
December 2004
BID results
March 2001
The Tender
December 2006
Regional EIA positive advice
September 2002
Project submission
June 2007
National EIA
April 2009
Starting operation
December 2005
EIA submission
December 2007
PU & Compliance with
Municipality plan
Edison Stoccaggio
APRIL 2012
REGIME
OMC 2007 - 29 marzo 2007
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S. Potito and Cotignola Project – Conclusions
Regulatory framework (2/3)
Time for developing a new storage facility is too long: from the bid to the Regional “EIA” 6 years, other 6
years for regime (if the PU decree comes before the end of 2007)
Changes in the regulatory framework were relevant for creating incentives for new investments in storage
facilities
Edison Stoccaggio is the first company following the new procedure for awarding storage concession.
A new Bid is ongoing (other 6 fields)
Will the process for new storages be shorter?
Will the tariff regulation keep on providing incentives?
How many new comers will really develop new storage capacities?
Edison Stoccaggio
OMC 2007 - 29 marzo 2007
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EDISON STOCCAGGIO S.p.A.
Regulatory framework (2/3)
S.Potito area view
THANK YOU
Web site: www.edisonstoccaggio.it
Storage concession area
Edison Stoccaggio
OMC 2007 - 29 marzo 2007
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