Caspian Report - Issue: 07 - Spring 2014

AntonIo SIleo
82
the end of 2011, gas consumption
reached its 2003 level.
the Trans Adriatic Pipeline (TAP), at present the
most ambitious project concerning the Italian
gas infrastructure system, can be considered
consistent with a security-led strategy.
On this basis, the Trans Adriatic
Pipeline (TAP), at present the most
ambitious project concerning the
Italian gas infrastructure system,
can be considered consistent with a
security-led strategy. TAP’s rationale
is mainly one of diversification: carrying
10 bcm of Azerbaijani natural
gas from the Shah Deniz II field each
year, TAP would provide a new and
significant energy source. Moreover,
a second phase is already planned,
in order to increase the nominal capacity
of the pipeline up to 20 bcm/
year, through a new compression
station. This additional capacity may
play a pivotal role in the Italian supply
strategy, which depends heavily
on imports (particularly from Russia,
Algeria and Libya), both in terms
of security and industry. In the recent
past, Italy has experienced gas
shortages, due to the particularly
rigid climatic conditions and lack of
flexibility in the volumes imported
from abroad. On those occasions,
the storage infrastructures played a
much larger role than usual, raising
questions about their economic and
strategic sustainability. Moreover,
alternative uses of gas, such as unconventional
industrial uses in steel
production and a substantial shift
in fuel transportation, are likely to
emerge.
3.
A similar figure for 2012: 11.5% (equal to 8.7 bcm).
A new southern route may also
have strategic implications for Italy,
strengthening its role as an entry
point for non-Russian, non-LNG gas
to travel to Northern Europe. In this
sense, the efforts of the European
Commission through the Southern
Gas Corridor initiative - despite the
obstacles posed by divergent national
interests – has a strong basis. In this
sense, TAP may play an important role
in fulfilling the demand of other European
countries, whose consumption
patterns also seem to be shrinking.
2. Trends in the Italian gas
market: an overview
Supply and Sources
Italy is heavily dependent on gas
imports. In 2013, the national production
share was limited to 11% of
total consumption (7.7 bcm), 3 while
net imports (imports minus exports)
amounted to almost 88% of the total
(61.7 bcm). Most of this imported gas
comes from Algeria and Russia. In
2011, Italy imported 22.9 bcm from
Algeria and 19.7 bcm from Russia.
Among others, Qatar (6.2 bcm) is the
main LNG importer, through two regasification
terminals (Panigaglia and
Portoviro).
Domestic Demand
Italian natural gas demand has continued
to shrink over the last decade,
aside from a minor and temporary
recovery in 2010. This decline was
anticipated, and indeed industry-led
since 2004: total industrial consumption
has dropped by more than 35%