More energy autonomy and market

Energy autonomy and security of energy supply

Energy independence is a fundamental strategic factor for the competitiveness of the Italian production system in the global economy.

“FSRU” Toscana Regasification Terminal guarantees a higher energy autonomy to Italian system:

  • Regasification is the natural gas acquisition method that allows Italy to be free from the obligation of supplying by gas pipelines from a limited number of suppliers.
  • LNG can be freely and directly bought from all producing countries. This promotes the competition and the independence of price bargaining and country’s competitiveness.
  • Regasification also allows to increase the gas supply in a flexible way, for example, in case of particular cold seasons or in case of international political crises causing interruptions in the gas supply by pipeline.
  • OLT  regasification plant is able to supply 3,75 billion cubic meters a year, which stands for about the 5% of the annual national needs.
  • The Emergency Plan was recently modified as per the emergency measures provided by the Legislative Decree of the Ministry of Economic Development. The aim is to guarantee the safety of the natural gas system through LNG storages for Peak Shaving service, which can be activated in case of need by the partially unused regasification terminals. In case of emergency, the Peak Shaving service would allow to insert gas in the network – previously unloaded and stocked into the tanks of the Terminal – at short notice, with the aim to face peak requests of the gas system for a limited period of time.

The market – The current market context

The LNG market has dramatically changed in recent years.
The long-term regasification contracts started to be progressively replaced by “spot” and “short term” contracts.

Currently, long-term contracts, which until few years ago they were the only available on the market,  are not sustainable anymore from a financial and economic point of view. Those Operators who signed long-term contracts are now trying to renegotiate them. These contracts are gradually replaced by SPOT contracts following the evolution of the European markets. We are witnesses of the birth of the Gas Stock Market in a lot of countries. In particular in Northern Europe, where this process is at a higher level, the prices of short term contract service were more profitable than those of long-term contract. This was also possible for the decrease of risks and of the commitments related to the contracts duration. OLT Terminal was the first in Italy that had to face this new reality.

“FSRU Toscana” can receive LNG from all the main worldwide operators for two reasons. Firstly, OLT Terminal can accept different qualities of LNG, secondly, the plant can moor nearly the 90% of the LNG carriers currently operating in the market. This flexibility will allow OLT to take the future market opportunities present in the Mediterranean Sea area.

OLT requested and obtained the necessary authorization to receive the LNG carriers belonging to “New Panamax” category. This decision refers to the changes occurred in the gas market, to the increasing trend of the vessels to partially unload LNG and to the necessity to guarantee the possible maximum flexibility. Therefore, this allows OLT plant  to take the opportunities of the continuous evolution of the LNG market also considering the new operators that could be connected to Italy by pipeline. This opportunity also represents a guarantee for the system to mitigate the recurrence of risks occurring in gas import (from the political events in Africa to the problems related to gas between Russia and Ukraine).