GAS NATURAL and Snam Rete Gas reached an agreement whereupon the latter will carry out the construction of the gas pipelines needed to connect the two projected LNG terminals to the Italian national gas transportation network, once the corresponding permits have been obtained.

The execution of both works will represent a significant investment to be made by Snam Rete Gas. GAS NATURAL has submitted the necessary bank guarantees, which have been obtained from one of Italy's major banks.

This agreement represents an important step ahead in the projects that GAS NATURAL submitted to the Italian authorities in 2004. The Spanish gas company thereby confirms its commitment to develop both projects, reinforced by the experience acquired in the LNG industry and in the construction and operation of regasification facilities, both in Spain and abroad.

In this sense, GAS NATURAL started in 1969 the operation of Spain's first LNG terminal in Barcelona, and even managed up to three similar infrastructures simultaneously (with Huelva and Cartagena). The company currently manages the sole LNG terminal in Puerto Rico, enjoying exclusive rights for the excess regasification capacity on the island.

Both projects for LNG terminals in Italy, with a capacity of 8 bn cubic metres each, will represent a total investment of around € 1 billion. The projects are currently pending the environmental permits from the Italian Ministry for the Environment.

The projects, designed by GAS NATURAL, represent a clear advantage vis-à-vis other types of projects, as they are located onshore instead of on offshore platforms. This results in lower investments, thereby permitting a lower cost level to be passed through the Italian consumer tariffs.

With these two projects, GAS NATURAL states its willingness to contribute to the liberalization of the Italian energy market, as well as to its security of supply, through the diversification of the procurement which currently depends 90% on piped gas.