Caspian Report - Issue: 07 - Spring 2014

It was suggested that Italy, with its geographical
position at the junction of North-African, North-
European and Russian streams, could be turned
into the “Southern Europe gas hub.”
1. Introduction
Italy, like most European countries,
is heavily dependent on gas imports
from outside the EU. Yet, as Italy’s
gas consumption grows, mainly due
to the completion of the methane
pipeline system in the country and
the increased use of gas for power
generation, there is a corresponding
decline in domestic production. 1 Inevitably,
the historical condition of
dependence will worsen. These circumstances
affect the market structure,
as almost 93% of Italian imports
flow through pipelines.
Among the possible interventions
considered over the last decade, it
was suggested that Italy, with its geographical
position at the junction of
North-African, North-European and
Russian streams, could be turned
into the “Southern Europe gas hub.”
This was clearly articulated in Italy’s
most recent National Energy Strategy
(NES). In this context, Snam, the
Italian transmission system operator
(TSO) provided for by the lawdecree
(D.L.) of January 24 th 2012,
n.1, modified in Law (L.) 24 th March
2012, n.27, and by the decree of the
Prime Minister (DPCM) 25 th May
2012, should play a major role in
contributing to supply security and,
in general, national energy security
(Sileo; 2012). 2 However, energy security
is not exclusively guaranteed
by a long-term strategy; a comprehensive
approach also demands the
ability to manage possible shortterm
supply shocks. The Italian gas
system has recently faced critical
situations, in particular in 2005 and
2006. Based on its practical experience,
Italy has learned how to cope
with emergencies, and always managed
to ensure the supplies for its
final domestic consumers. Moreover,
since 2008, gas consumption
has dropped, thanks to the financial
crisis. Having stopped growing, by
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CASPIAN REPORT, SPRING 2014
1.
It is important to say that Italian natural gas domestic production has inverted the trend since July 2011, returning to increase.
2.
According to the Italian legislation a decree-law is a decree passed by the Italian Government as an urgent measure, which has to
be approved by the Parliament within 60 days in order to become law.