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Snam: Europe's Gas Infrastructure Titan & The Energy Transition Bet
I. Introduction: The Invisible Backbone of European Energy
In the winter of 2022, as Russian gas supplies to Europe collapsed and power prices across the continent spiraled to levels that threatened to shutter factories and freeze households, a quiet transformation was underway in the industrial port of Piombino on Italy's Tuscan coast. There, workers raced against the clock to connect a 293-meter floating regasification unit—a vessel purchased just months earlier—to Italy's gas grid. When the Golar Tundra (now renamed Italis LNG) received its first commercial cargo in July 2023, it represented far more than an engineering achievement. It symbolized how a company founded in Mussolini-era Italy to build methane pipelines had become a critical instrument of European energy security.
Snam S.p.A. today commands a market capitalization of approximately €19 billion, making it one of Italy's largest listed companies and Europe's preeminent natural gas infrastructure operator. The company operates approximately 32,862 kilometers of gas pipelines in high and medium pressure, representing roughly 94% of Italy's entire gas transport network. But these figures only hint at the strategic significance of a company that sits at the crossroads of Europe's most consequential energy debates—from the urgent need to replace Russian gas to the long-term bet on hydrogen as the molecule of the future.
The utility operates not just in Italy but, through associated companies, in Austria (TAG, GCA), France (Terēga), Greece (DESFA), the UAE (ADNOC Gas Pipelines), and the United Kingdom (Interconnector UK and dCarbonX Limited). It is one of the main shareholders of the Trans Adriatic Pipeline (TAP).
The central question facing investors is whether Snam can navigate the seemingly contradictory imperatives of its existence: maintaining and expanding fossil fuel infrastructure to ensure energy security while simultaneously positioning itself for a world where natural gas may eventually become stranded. The company's 2025-2029 strategic plan, announced in January 2025, allocated €12.4 billion in total investments—a significant increase from prior plans—with the bulk directed toward network enhancements including LNG regasification capacity and hydrogen-ready assets.
This is the story of how a wartime Italian state enterprise became Europe's largest regulated gas infrastructure company—and the enormous bet it is making on the hydrogen age.
II. Founding & The ENI Era: Birth of Italy's Gas Backbone (1941–2000)
The Methane Discovery & State-Led Development
The story of Snam cannot be understood apart from the broader saga of Italian industrialization and the visionary—some would say ruthless—figure who shaped the country's energy destiny. Snam was founded on October 30, 1941, in San Donato Milanese, Lombardy, with the name Società Nazionale Metanodotti, with participation from Ente Nazionale Metano (Agip), Regie Terme di Salsomaggiore, and Società Anonima Utilizzazione e Ricerca Gas Idrocarburati (SURGI). The objectives were the construction of methane pipelines, and the distribution and sale of gas. During wartime, methane became crucial for Italy, leading to the construction of the first methane pipeline bringing gas from the wells in Salsomaggiore (Parma) to Lodi and Milan.
In 1941, government investment created SocietĂ Nazionale Metanodotti (Snam) to build and run methane pipelines, and SocietĂ Azionaria Imprese Perforazioni (Saip), a state-owned consortium of drilling companies. Italy, a resource-poor nation dependent on imported coal and petroleum, desperately needed domestic energy sources. The methane deposits of the Po Valley offered a glimmer of hope.
The Mattei Era & ENI Integration
The transformation of this modest pipeline company into a national champion came through the agency of Enrico Mattei, one of the most remarkable—and controversial—figures in post-war European business history. After World War II, Mattei was given the task of dismantling the Italian petroleum agency Agip, a state enterprise established by Fascist Italy. Instead, Mattei enlarged and reorganized it into the National Fuel Trust (Ente Nazionale Idrocarburi, ENI).
Mattei directed the agency to increase exploration in the Po River valley, and soon the drillers succeeded in discovering important natural gas reserves. Future finds of gas and crude oil deposits in Italy saved the country millions of lire on foreign imports and established the role of state-owned enterprises in directing Italy's energy future.
In 1946, Agip's team at the Caviaga gas field made a successful methane strike. In 1949, Agip acquired full control of the state-owned pipeline company Snam, which enabled Mattei to begin to establish a network of methane pipelines to communities and industry in northern Italy.
Mattei's genius lay in recognizing that controlling the transportation and distribution network—not just production—was the key to energy dominance. By perseverance and luck he found important reserves of natural gas in northern Italy. He distributed the gas to industrial plants by building a large pipeline network. This, among other things, contributed to the expansion of the steel industry, which had been stagnating at that time.
Mattei's strategy was to use natural gas to support the development of a national industry in Northern Italy, sustaining the postwar boom known as the Italian economic miracle.
The organizational structure Mattei created was deliberately complex, designed to insulate his energy empire from political interference while maintaining state backing. In 1955, Snam Montaggi was established, incorporating SAIP in 1957 and becoming Saipem. In 1956, Snam Progetti (later Snamprogetti) was founded for designing large onshore plants.
In 1961, the construction of two methane pipelines in central and southern Italy began. The first transported gas discovered in the province of Chieti to Terni and Rome, and the second transported methane extracted in Basilicata to the coast of Puglia. Within ten years, the gas transportation network reached a national scale with an extension of 8,000 kilometers.
Building Import Infrastructure
As domestic production proved insufficient for Italy's growing appetite, Snam pivoted to becoming an import infrastructure specialist. Snam (SocietĂ Nazionale Metanodotti) has provided integrated natural gas procurement, transportation and sale services in Italy since 1941. It gradually put together an intricate system of natural gas pipelines, covering the whole of Italy, and built important pipelines that today allow the country to import from different areas: Russia, the Netherlands, Algeria, the North Sea and Libya. In 1971, Snam designed and built Italy's first liquefied natural gas (LNG) regasification plant at Panigaglia, in the Gulf of La Spezia.
In 1974, gas from the Siberian fields arrived in Sergnano (Cremona), and the same year saw the start of an 830-kilometer pipeline importing gas from the Groeningen field (Netherlands). By 1980, Snam's gas pipelines reached a total length of nearly 15,000 kilometers.
This infrastructure investment made Italy uniquely dependent on natural gas among major European economies—a strategic vulnerability that would be dramatically exposed four decades later when Russia invaded Ukraine. Italy produces more than 40% of its electricity from natural gas, a share that remains among the highest of any major economy and that creates both operational risk and, paradoxically, strategic opportunity for the company that controls the pipes.
III. EU Liberalization & Corporate Unbundling (2000–2012)
The Letta Decree & Market Opening
The comfortable world of vertically integrated state-backed energy monopolies began to unravel at the turn of the millennium, as the European Union pushed aggressively for market liberalization. Snam Rete Gas was incorporated on 15 November 2000 to house all Snam's Italian transportation, dispatching and LNG regasification activities. The corporate unbundling of these activities was decided pursuant to the Letta Decree (164/2000) which transposed the European Directive on the liberalisation of the gas market. On 6 December 2001, after the Electricity and Gas Authority issued a resolution establishing the criteria for defining transportation tariffs, Snam Rete Gas was floated on the stock exchange.
The EU's Third Energy Package represented a fundamental challenge to the integrated utility model that ENI had perfected. Brussels regulators argued—with considerable justification—that allowing producers to control transportation networks created inherent conflicts of interest and barriers to competition. The solution was separation: ownership unbundling that would force European energy giants to choose between pipes and molecules.
The 2009 Consolidation
Before the final break with ENI, Snam executed one of the most consequential consolidations in European utility history. In 2009, the Company acquired 100% of Stogit, Italy's largest natural gas storage field operator, and 100% of Italgas, the country's biggest gas distributor. This added the other two regulated gas activities in Italy to Snam's offering: storage and distribution. The June 2009 transaction turned Snam into a key integrated regulated gas activities operator, and the largest by regulatory asset base (RAB) in mainland Europe.
This consolidation was strategically brilliant: by assembling transportation, storage, and distribution under one roof, Snam created a vertically integrated regulated infrastructure company with multiple earnings streams and significant scale advantages. The regulatory asset base—the capital foundation upon which allowed returns are calculated—became the largest in continental Europe, providing a stable platform for decades of predictable earnings.
KEY INFLECTION POINT #1: The 2012 ENI Ownership Unbundling
The defining moment in Snam's modern history came in 2012, when European regulators finally forced the separation that fundamentally transformed the company's identity and strategy. The Prime Ministerial Decree of 25 May 2012 provided for the creation by 25 September 2013 of an ownership unbundling system extended to all regulated natural gas transportation, distribution, storage and regasification activities, as well as for the sale by the then controlling shareholder, Eni, of its entire stake in Snam in light of its status as a producer and seller of energy. Specifically, the Prime Ministerial Decree ordered Eni to sell to CDP in a direct deal, as quickly as market conditions allowed and in any event by 25 September 2013, in one or more instalments, a total stake of no less than 25.1% of Snam by means of direct negotiation.
CDP and ENI agreed a price of about €3.517 billion, equal to the weighted average official price of SNAM shares between 26 April and 25 May 2012, increased by a premium of 3%. CDP paid about €1.759 billion (50% of the full price) at today's closing, while the remainder will be settled in two subsequent instalments of equal value (by 31 December 2012 and by 31 May 2013).
The ownership unbundling from Eni was completed on 15 October 2012 through the sale of approximately 30% of Snam's capital to CDP Reti S.r.l.
The transition to CDP (Cassa Depositi e Prestiti) ownership fundamentally changed Snam's strategic posture. Snam was originally a subsidiary of Italian energy company Eni. It has since become an independent company, whose largest shareholder is CDP Reti, a holding company controlled by the Italian state.
Why did this matter so much? Under ENI's control, Snam operated primarily as an instrument of its parent's integrated strategy—transportation serving production. Independence freed Snam to pursue European expansion without the conflicts inherent in being owned by a major gas producer and supplier. It also positioned the company as a neutral infrastructure provider, essential for a company seeking to attract third-party shippers and eventually, perhaps, molecules other than natural gas.
IV. International Expansion & Strategic Positioning (2012–2021)
Building a Pan-European Footprint
With independence came ambition. Snam moved aggressively to transform itself from an Italian utility into a pan-European infrastructure platform. Having acquired 31.5% of Interconnector UK in 2012 as part of a joint venture with Fluxys, Snam (45%; 40.5% at 31 December 2015), alongside Singapore sovereign wealth fund GIC (35%) and EDF (20%), successfully completed the acquisition of TIGF from Total in July 2013.
TIGF is active in the gas transportation and storage segment in south-west France, with a 5,000-km gas transportation network and two storage fields.
On 19 December 2014, the Company acquired from CDP Gas S.r.l. 84.47% (equivalent to 89.22% of the economic rights) of Trans Austria Gasleitung GmbH (TAG), the company that owns the Austrian section of the gas pipeline linking Russia and Italy.
The TAP investment proved particularly significant for Italy's energy security strategy: Snam's international development continued with the acquisition of a 20% stake in Trans Adriatic Pipeline AG (TAP), the company responsible for developing the pipeline that will run from the Turkey-Greece border to Italy along the Southern Corridor, enabling gas produced in Azerbaijan to reach European markets. Our investment in the project will consolidate the primary position of Snam and Italian infrastructure in improving competition between energy sources and securing gas supplies for Europe.
Trans Adriatic Pipeline's shareholding is comprised of BP (20%), SOCAR (20%), Snam (20%), Fluxys (20%) and Enagás (20%).
Interconnector operates the physically, bi-directional gas pipeline between the UK and Belgium, providing 20 bcm/yr of UK export capacity and 21.2 bcm/year of UK import capacity. Our operation is located over three sites - commercially in London, and physically from gas terminals at Bacton in the UK, and Zeebrugge in Belgium. The company is part of the Fluxys Group and SNAM, who own an equity interest of 76.32% and 23.68% respectively.
The 2016 Italgas Spin-Off
Having built the integrated platform, Snam made a counterintuitive strategic decision: to shrink itself. Starting November 7, 2016, following the partial proportional spin-off of Snam S.p.A., with the transfer of 86.5% of the stake held in Italgas Reti S.p.A. to its shareholders, Italgas S.p.A. was re-listed on the stock exchange after 13 years.
The logic was elegant: distribution (the final mile to homes and businesses) operated under different regulatory dynamics and required different capabilities than large-scale transmission and storage. By spinning off Italgas, Snam could focus its capital and management attention on the high-barrier, scale-intensive businesses where it enjoyed the greatest competitive advantages.
Brand Renewal & Strategic Pivot
From 2018, Snam's brand identity was renewed, with a new logo and values accompanying the company in new projects such as the construction of infrastructure for stable and secure energy supplies and the development of gas as a renewable source. The renewed brand marked the transition towards the concept of landscape and environmental responsibility.
In April 2019, Snam launched the first injection of a hydrogen and natural gas into the pipeline, the Europe's first commercial test of a hydrogen-methane blend in a high-pressure network.
This was more than marketing. It reflected a fundamental strategic repositioning: from "natural gas infrastructure company" to "energy infrastructure company"—a subtle but crucial distinction that would frame the company's energy transition narrative.
V. The 2022 Ukraine Crisis & Energy Security Emergency
The Perfect Storm
When Russian tanks rolled across the Ukrainian border in February 2022, they shattered not only the post-Cold War European security architecture but also the energy model that had underpinned continental prosperity for decades. For Italy, the impact was existential.
Since Italy produces more than 40% of its electricity from natural gas, a spike in gas prices means Italians are now paying sometimes four times more for electricity than a year ago. And Italy's main supplier, Russia, provides 40% of the country's gas.
Italy's minister for ecological transition Roberto Cingolani stated: "It was crazy to rely only on gas. It's a big mistake to be so much dependent on a single country."
On 26 February 2022, Italy activated the Early Warning level in response to Russia's invasion of Ukraine.
Russian gas amounted to 40% of Italy's imports in 2021; it was slashed to 16% in 2022.
Snam's Emergency Response: FSRU Deployment
Into this crisis stepped Snam, tasked by the Italian government with a mission that would have seemed impossible under normal circumstances: rapidly deploying new LNG import capacity to replace Russian pipeline gas. For the new LNG import terminals – essential to receiving the larger LNG volumes expected in the coming years – the government turned to Snam. At the end of March 2022, the Italian Ministry for Ecological Transition tasked Snam with realising two FSRU import facilities.
This task was not easy because of the growing competition among consumers in the international shipping market. However, between June and July 2022, Snam finalised the acquisition (for a total of about 700 million euros) of two FSRU vessels, each with a regasification capacity of 5 bcm/y (the Golar Tundra and the BW Singapore). According to Snam's plans, the Golar Tundra is to be located near Piombino (in the Tuscan province of Livorno) and commence operation by the spring of 2023. The BW Singapore is to be located near Ravenna (in Emilia Romagna) and commence operation by 2024. When fully operative, these FSRUs could cover up to 13% of Italian gas demand.
Gas network operator Snam SpA won approval to install Italy's newest liquefied natural gas terminal, overcoming local opposition and boosting the country's bid to improve energy security and wean itself off Russian supplies.
During a tour of the Piombino facility, Snam chief executive Stefano Venier said, "The arrival of the first load of gas, which will allow us to carry out the plant's testing and fine-tuning operations, is another important step in equipping the country with an infrastructure that is fundamental to the security and diversification of supplies. Proof of this is the fact that 86% of the entry capacity has already been sold to multiple operators for 20 years, and [100% of capacity has been sold over] the next three years. We started this 11 months ago with the purchase of the Golar Tundra, and for the past six months we have been working with about 450 people on the shore and quayside sites employing 150 sub-contractors and suppliers."
According to Snam, the BW Singapore vessel was moored at the Petra platform located eight kilometers offshore Ravenna on February 28, 2025. Formerly used to dock oil tankers, the platform was recently repurposed to accommodate the FSRU, which reached the port of Palermo in December 2024. "With the ship docking in Ravenna perfectly on schedule, Italy can rely on a new strategic asset, which, combined with the Italis Lng moored in Piombino, is another fundamental step towards supply diversification and the Country's energy security," said Snam CEO, Stefano Venier.
In 2024, for example, LNG met a quarter of Italy's gas demand, with 150 ships from around 10 different countries reaching the four regasification terminals in Italy. With the entry into operation of the Ravenna terminal, Italy has five operational terminals. Snam said that this trend is continuing also in 2025. "As of today, Italy received around 60 LNG tankers, half of which coming from the USA – up from approximately a third last year – from Qatar and from various African countries, for a total volume of almost 6 billion cubic meters."
The country's overall regasification capacity will then rise to 28 billion cubic meters, equally distributed between the Tyrrhenian and Adriatic coasts, for a total volume equivalent to what the pipeline imported from Russia in 2021, before the Russian-Ukrainian war, according to Snam.
Strategic Implications
The crisis transformed Snam from a steady, somewhat boring utility into a national strategic asset. As CEO Venier noted, "We used to live in a world where gas came from the east," commenting that "today we have flows coming mainly from the west and going east, in the opposite direction, and above all increasingly significant flows going north from the south." There was a paradigm shift, and it was evident how the system was turned upside down, but without ever losing sight of the primary objective, which was to ensure that gas flows remained the same.
"Italy," Venier said, "enjoys an advantage not only because of its geographic position, but also because of its infrastructure, because these five interconnection points are joined by three LNG (liquefied natural gas) regasification units that will soon become five, for a total of ten landing points and a flexibility and balancing of sources that no other European country has."
The percentage of Russian gas transported through Snam's pipelines is now only about 5-6% of global consumption. CEO Venier stated: "The possible end of the Russian gas transit agreement to Europe will have a 'very negligible' impact on Italy. Still, the continent remains vulnerable with its increased reliance on imported cargoes. We are in a fragile situation given geopolitics and now — in Italy and Europe — we have exposure to LNG trading."
VI. The Energy Transition Strategy: Hydrogen, Biomethane & CCS
The Hydrogen Bet
The question every investor must grapple with is whether Snam's gas infrastructure represents a stranded asset waiting to happen—or a platform for capturing the next energy transition. The company has placed a massive bet on the latter thesis, arguing that its pipes and storage facilities can be repurposed for hydrogen and other low-carbon molecules.
By 2025, the company has already launched flagship projects like the Modena Hydrogen Valley, a green hydrogen hub capable of producing 400 tonnes annually, and the SoutH2Corridor, a cross-border initiative to import North African hydrogen to Europe.
The SoutH2 Corridor is a 3,300 km dedicated hydrogen pipeline corridor connecting North Africa, Italy, Austria and Germany led by TSOs Snam, TAG, GCA and bayernets. On April 8th 2024 all TSOs projects entered the 1st List of Projects of Common Interest (PCI) under the revised TEN-E Regulation published by the European Commission. The SoutH2 Corridor aims to supply low-cost renewable hydrogen produced in North Africa to European demand clusters.
The Italian H2 Backbone is composed of around 2300 km of pipelines and several hundred MW of compressor stations, expected to become dedicated hydrogen assets by 2030. With an import capacity of 448 GWh/day from North Africa, this project is a major European renewable hydrogen import artery. Due to its strategic location, the Italian H2 Backbone is a key asset for the import of large quantities of renewable hydrogen produced in North Africa. Snam is in ongoing collaboration with GW-scale hydrogen producers in North Africa and has collected signed letters outlining an intent to produce circa 2.5 Mtpa of renewable hydrogen.
With a hydrogen import capacity of 4 Mtpa from North Africa, the corridor could deliver more than 40% of the REPowerEU import target. The SoutH2 Corridor, which is expected to be fully operational as early as 2030, consists of individual PCI project candidates including the "Italian H2 Backbone" promoted by Snam Rete Gas.
Snam acquired technological know-how for the delivery of hydrogen-related projects through the stakes of ITM Power and Industrie De Nora. Snam acquired 33% of De Nora, a global leader in alkaline electrodes, collaborating with fuel cell operators. Snam acquired a minority stake in ITM Power, a UK based manufacturer of PEM electrolysers and one of the market leaders at global level.
Snam invested €33 million in ITM in October 2020, an early example of a wider trend of utilities backing providers of hydrogen technology. A month later, the company spent about €400 million to acquire one-third of Industrie De Nora SpA, a family-owned Italian company that also makes components for hydrogen production.
Biomethane Integration
While hydrogen steals the spotlight, biomethane remains a cornerstone of Snam's growth narrative. In 2023, the company secured a €264 million loan from the European Investment Bank (EIB) to construct 240 kilometers of pipelines connecting biomethane plants to Italy's national grid. This infrastructure can transport up to 1.13 billion cubic meters of biomethane annually—a critical step toward the EU's target of 5 billion cubic meters by 2030.
Carbon Capture & Storage (CCS)
In September 2024, Eni and Snam, within the framework of an equal Joint Venture set up for the purpose, announced the commencement of CO2 injection activities in the reservoir for Phase 1 of Ravenna CCS.
Phase 1 will focus on capturing, transporting, and storing approximately 25,000 tonnes of COâ‚‚ emissions annually from Eni's natural gas treatment plant located in Casalborsetti, within the municipality of Ravenna. After capture, the carbon dioxide will be transported via repurposed gas pipelines to the offshore Porto Corsini Mare Ovest platform, where it will be injected and stored at a depth of 3,000 meters in the depleted Porto Corsini Mare Ovest gas field. The project has already achieved a significant reduction of over 90% in COâ‚‚ emissions from the chimney of the Casalborsetti plant, with peaks reaching up to 96%. This accomplishment is particularly impressive given the challenging conditions of a carbon concentration below 3% and low atmospheric pressure. As a result, Ravenna CCS stands out as the world's first industrial-scale project with such a high carbon capture efficiency.
Over the coming years, with the Phase 2, the industrial-scale development of the project will be able to store up to 4 million tonnes of CO2 per year by 2030, in line with the goals defined by Italy's Integrated National Energy and Climate Plan (PNIEC). With the total storage capacity of the depleted gas fields of the Adriatic Sea, and based on market demand, the volumes of CO2 captured and stored underground could reach 16 million tonnes per year.
Snam CEO, Stefano Venier, commented: "The commitment to the Ravenna CCS project is an integral part of our strategic plan and is aligned with our intention to position ourselves as a multi-molecule operator in order to enable a fair and balanced energy transition, in which offering even the most energy-intensive players the opportunity to undertake decarbonisation paths that preserve their competitiveness."
Sustainability Commitments
In 2024, Snam also proposed a new ambition statement ("Energy infrastructure for a sustainable future") highlighting new sustainability goals. The expression highlights new sustainability goals, including CO2 emission reduction and achieving carbon neutrality by 2040, alongside the "Net Zero" objective by 2050.
In 2024, Snam was once again ranked at the top of the Sustainalytics index for the gas utility sector (first out of 96). For three consecutive years (2021-2022-2023), Snam received the United Nations' Gold Standard for its commitment to reducing methane emissions.
VII. Current Business Model & Financial Performance
Segment Breakdown
Snam Rete Gas (SRG), part of the Snam Group, is Italy's main gas Transmission System Operator (TSO). SRG operates a nationwide pipeline network of 32,000 km in length and supplies around 95% of the Italian market.
Net sales break down by activity as follows: transport of natural gas (68.9%): owns, at the end of 2024, a network of around 32,926 km of pipelines (62 billion m3 transported in 2024); storage of natural gas (16.4%); regasification of liquefied natural gas (4.4%); other (10.3%): development and management of energy efficiency projects and biogas and biomethane production units, gas compression services, location of fiber-optic cables, etc.
Snam has three regulated segments: transportation, storage, and regasification/liquefied natural gas. The transportation segment, largely natural gas pipelines, contributes 80% of group EBIT. Storage contributes 20%, and regasification is only a marginal contributor.
Recent Financial Performance
Italian energy infrastructure company Snam SpA (BIT:SRG) presented its first-half 2025 consolidated results in July, revealing solid financial performance despite challenging market conditions. Snam delivered robust financial results for the first half of 2025, with adjusted EBITDA reaching €1,492 million, a 5.3% increase year-over-year, while adjusted net income grew by 8.5% to €750 million. These improvements came despite ongoing energy market volatility in Europe.
The company's financial performance was supported by a 6% increase in Italian gas demand, with the thermoelectric sector showing particularly strong growth of 12%. This uptick in demand underscores gas's continuing importance in Italy's energy mix, especially for electricity generation during periods of low renewable energy production.
Snam's international associates contributed €204 million, a 30% increase year-over-year, with significant contributions from TAP (€36m), SeaCorridor (€29m), and Terega (€23m).
For the full year 2025, Snam has set an EBITDA guidance of €2.85 billion and a net income guidance of €1.35 billion, with expectations to potentially exceed these targets based on first-half performance.
2025-2029 Strategic Plan
In Snam's 2025-2029 Strategic Plan, total investments amount to €12.4 billion, divided into €10.9 billion for the enhancement of transport, storage and LNG infrastructure and €1.5 billion for the development of energy transition businesses. Between 2030 and 2034, Snam foresees investment opportunities of up to €14.7 billion, which are added to the €12.4 billion foreseen over the Plan period. This brings total investments planned over the 2034 horizon to approximately €27 billion.
Snam also expects an improvement in the dividend policy: a 2024 dividend of €0.2905 has been confirmed, up 3 percent compared to 2023.
Despite reductions in allowed returns for regulated segments (transportation: 5.5%, storage: 6.1%), Snam's strategic pivot to biomethane and hydrogen mitigates these headwinds. The company's €12.4 billion investment plan for 2025–2029, with a significant portion allocated to biomethane integration, signals confidence in its ability to monetize the energy transition.
While these regulated assets benefit from efficient scale, regulation limits pretax allowed returns to ensure low prices for customers. For 2025, the regulator has decided to cut allowed returns by 40 basis points for transportation to 5.5%, 50 basis points for storage to 6.1%, and 50 basis points for regasification to 6.2%, amid a lower interest rate scenario.
VIII. Leadership: Stefano Venier and the Crisis Mandate
Stefano Venier (born April 3, 1963, in Udine, Italy) is an Italian business executive. Since 2022, he has served as CEO of Snam. Previously, from 2014 to 2022, he held the position of CEO of the Hera Group. Stefano Venier earned a degree in Mathematical and Physical Sciences, specializing in IT, from the University of Udine. He later completed a Master in Energy and Environmental Economics at the Scuola Enrico Mattei.
In March 2022, he was appointed CEO of Snam, a role he currently holds. From the start of his tenure, which coincided with the escalation of the Russo-Ukrainian War following Russian invasion of Ukraine in 2022, he emphasized energy security. Under his leadership, Snam acquired two floating regasification units.
Originally from Udine, where he graduated in Computer Science, before earning a Master's degree in Energy and Environmental Management and Economics at the E. Mattei School of Advanced Studies, Venier has a unique relationship with the city of Bologna, having served from 2014 to 2022 as CEO of the Hera Group, Italy's first aggregation of municipalized companies. In addition to holding the position of CEO at Hera, Venier was also General Manager of Development and Market Energy from 2008 to 2014.
Past CEO, Snam S.p.A. Executive Manager with over 30 years of national and international experience, with a specialization in the Energy and Utilities sectors. Chief Executive Officer and General Manager of Snam Spa from April 2022 to May 2025. Previously, he spent about 18 years at Hera Spa in increasingly senior roles; he served as CEO from 2014 to 2022. From 1996 to 2004, he worked at the consulting firm Kearney, eventually holding the position of Vice President for Energy & Utilities. Among earlier experiences, he spent over 7 years within the Eni Group, particularly in the company operating in petrochemicals.
Venier's appointment just weeks after Russia's invasion proved fortuitous. His background at Hera—a multi-utility requiring constant stakeholder management across municipalities—prepared him for the political dimensions of Snam's emergency role. His consulting experience at A.T. Kearney gave him the strategic framework for thinking about long-term positioning amid short-term crisis. And his formative years at ENI provided deep familiarity with the Italian energy system's peculiarities.
IX. Playbook: Business & Strategic Lessons
Key Lessons for Infrastructure Investors
1. The Power of Regulated Returns
Snam's business model offers a masterclass in the economics of regulated infrastructure. Returns are set by ARERA (Italy's energy regulator) based on the Regulatory Asset Base (RAB)—essentially, the capital invested in regulated activities. Snam's regulated revenues increased by 20.1% year on year in the first half of 2024. This rise was mainly driven by a higher weighted average cost of capital and regulated asset base growth in its gas transportation and storage segments.
The RAB-based model creates predictable cash flows but requires careful capital allocation discipline. Every investment adds to the regulatory base and therefore to future allowed earnings—creating an incentive to invest that regulators must balance against ratepayer interests.
2. Navigating State Ownership Transitions
In becoming SNAM's controlling shareholder, CDP has strengthened its role in supporting the growth of the country, part of which involves financing the modernisation and development of major strategic infrastructure networks: the entry of CDP as lead shareholder will ensure that SNAM can implement and further develop the Group's investment plans in Italy and Europe while preserving the public service nature of its operations.
The transition from ENI subsidiary to CDP-controlled independent company demonstrates that ownership changes need not disrupt operational focus if properly structured. The key was maintaining continuity of strategy while enabling new strategic degrees of freedom.
3. Crisis as Opportunity
The 2022 energy crisis transformed Snam from a steady utility into a national strategic asset, accelerating FSRU deployment and capital investment. The Piombino ship "has been operating for a year and a half and has demonstrated its strategic importance in two ways: the first, having sold all its capacity for twenty years" and the second way is linked to the need to diversify supplies in Italy. The Piombino ship "has received more than 50 cargoes, half of which came from the United States" and 90 percent of its capacity "has already been purchased by operators for the next twenty years". Venier thus reiterated the usefulness of the ship "also awaited by operators". This shows how that infrastructure "is useful and above all does not weigh on the pockets of Italians since they are paid for by operators."
4. The Platform Approach
Snam is using its gas infrastructure as an option on future molecules. The hydrogen-ready investment strategy essentially converts existing assets into call options on multiple energy transition scenarios. If hydrogen scales, Snam's pipes and storage become more valuable. If it doesn't, the assets remain useful for natural gas (at least for several more decades).
5. ESG as Strategy, Not Marketing
In the energy transition space, Snam highlighted the strong technical performance of its Ravenna carbon capture and storage (CCS) project, 72 MW of biomethane in operation, and a €24 million co-financing agreement for hydrogen projects. The company has also aligned 32% of its capital expenditure with the EU Taxonomy and 61% with UN Sustainable Development Goals.
X. Competitive Positioning: Porter's Five Forces & Hamilton's Seven Powers
Porter's Five Forces Analysis
1. Threat of New Entrants: VERY LOW
Gas transmission networks are classic natural monopolies. Building duplicate pipeline networks is economically irrational—the capital requirements are enormous, regulatory approvals are complex, and the incumbent's cost advantages are insurmountable. Snam Rete Gas, part of the Snam Group, operates a 32,000-kilometre nationwide pipeline network and supplies around 95% of the Italian market. Most of Snam's revenues are regulated to ensure that services are provided to third parties according to non-discriminatory criteria.
2. Bargaining Power of Suppliers: MODERATE
For construction and maintenance, Snam contracts with engineering firms and equipment suppliers where competition exists. However, for FSRUs and specialized equipment, the supplier base is limited. The task of acquiring FSRUs was not easy because of the growing competition among consumers in the international shipping market.
3. Bargaining Power of Buyers: LOW TO MODERATE
Gas shippers must use Snam's network—there's no alternative. However, regulated tariffs cap returns and ARERA monitors for fair treatment. The regulatory framework essentially substitutes regulatory oversight for buyer bargaining power.
4. Threat of Substitutes: MODERATE AND GROWING
This is the existential question. Electrification, renewable energy, and declining industrial gas demand all threaten the long-term relevance of gas infrastructure. Italy's gas demand dropped by 19% from 2021 to 2024. Italy's gas consumption dropped 19% between 2021 and 2024, while its LNG imports fell 12% in 2024, raising questions about its continued investment in both fuels.
However, the substitution threat is mitigated by: (a) gas's role as backup for intermittent renewables; (b) hard-to-electrify industrial applications; (c) the potential for hydrogen repurposing; and (d) the decades-long timeline for energy transition.
5. Competitive Rivalry: LOW
There is essentially no competitive rivalry in transmission—Snam owns approximately 94% of Italy's high-pressure gas transport infrastructure. The competitive dynamic exists primarily with other European TSOs for continental flows and with alternative import routes.
Hamilton Helmer's Seven Powers
Cornered Resource: Snam possesses perhaps the purest form of cornered resource—a physical network that cannot be replicated at economic cost. The 32,000+ kilometers of pipelines, storage facilities, and strategic geographic position represent irreplaceable assets.
Scale Economies: Transmission and storage exhibit significant scale economies. The marginal cost of transporting an additional cubic meter of gas through existing infrastructure is minimal compared to the fixed cost of building that infrastructure.
Counter-Positioning: The transition to hydrogen represents a potential counter-positioning move. If Snam can successfully repurpose gas infrastructure for hydrogen while oil & gas producers remain committed to fossil fuels, Snam may benefit from incumbents' inability to respond due to their different business model.
Network Effects: Limited in the traditional sense, but the interconnected European gas network does create value through optionality and security of supply that increases with network breadth.
Switching Costs: Extremely high for shippers. Connecting to alternative infrastructure would require massive capital investment and regulatory approval.
Process Power: Snam has accumulated eight decades of operational experience in gas transportation and storage. This institutional knowledge represents a significant competitive advantage in operational efficiency and safety.
Branding: Limited relevance in a B2B regulated utility context, though ESG credentials increasingly matter to institutional investors.
XI. Bull Case vs. Bear Case
The Bull Case
Energy Security Premium: The Ukraine crisis permanently elevated energy security as a policy priority. Snam, as the backbone of Italian gas infrastructure and increasingly a hub for Southern European energy flows, benefits from this structural shift. Government support for infrastructure investment is likely to remain strong for decades.
The Hydrogen Option: If hydrogen scales as proponents expect, Snam's infrastructure becomes dramatically more valuable. Snam's strategic investments in hydrogen pipelines, storage facilities, and partnerships with industrial players are positioning it as a leader in a market Barclays estimates could reach €200 billion annually by 2030. The SoutH2 Corridor and Italian H2 Backbone represent first-mover advantages in a potentially transformative market.
Disciplined Capital Allocation: Management has demonstrated the ability to execute large acquisitions (FSRUs, international stakes) while maintaining balance sheet discipline. The regulated asset base provides stable cash flows to fund growth investments.
Dividend Security: The company offers a forward dividend yield of approximately 5.19%. The regulated revenue model provides high visibility on earnings and dividend sustainability.
Geographic Positioning: Italy's position as a Mediterranean gateway gives Snam structural advantages for LNG imports and potentially for North African hydrogen imports. The five-pipeline plus five-LNG terminal configuration provides unmatched flexibility.
The Bear Case
Declining Demand Trajectory: Italy's incentive programme for gas and LNG operators is out of step with market reality, funnelling investment into infrastructure projects that will be underutilised. New IEEFA research urges better alignment of government and regulatory support with market needs. The existing regulatory programme may encourage excessive capital expenditure on redundant gas and LNG infrastructure, despite Italy's recent declining demand. Italy's gas demand dropped 19% from 2021 to 2024. LNG imports fell 12% in 2024. Nonetheless, the country is on track to overbuild its regasification capacity, which is set to triple between 2022 and 2026.
Hydrogen Skepticism: Hydrogen infrastructure remains largely theoretical. Production costs for green hydrogen are still far above competitive levels. There is as yet no guaranteed demand for hydrogen in 2030 or even 2050. If hydrogen fails to scale, Snam will have invested heavily in preparing for a future that doesn't materialize.
Regulatory Pressure: For 2025, the regulator has decided to cut allowed returns by 40 basis points for transportation to 5.5%, 50 basis points for storage to 6.1%, and 50 basis points for regasification to 6.2%, amid a lower interest rate scenario. While cuts have been modest, the regulatory trend is toward lower returns, squeezing margins on a growing asset base.
Stranded Asset Risk: The fundamental question is whether natural gas infrastructure will retain value through mid-century. If electrification accelerates faster than expected, or if hydrogen proves uneconomic, Snam's core assets could face meaningful impairment.
Execution Risk on Major Projects: The SoutH2 Corridor, Ravenna CCS, and other flagship projects require multi-year execution across multiple jurisdictions. Delays or cost overruns could impact returns. The energy transition is capital-intensive, and delays in project execution—such as permitting hurdles for cross-border hydrogen pipelines—could impact timelines.
XII. Key Metrics for Long-Term Investors
For investors seeking to monitor Snam's ongoing performance, three metrics deserve particular attention:
1. Regulatory Asset Base (RAB) Growth
The RAB is the foundation of Snam's earnings power. Growth in RAB—through capital investment—translates directly into higher allowed revenues under the regulatory framework. Watch for: organic RAB growth through network investment, hydrogen-ready asset additions, and the transition of energy transition investments into the regulated perimeter. Target: Management guides to average RAB growth above 5% per year through 2026.
2. Tariff RAB-to-Market-Cap Ratio
This metric captures whether the market is valuing Snam's regulated assets at a premium or discount to their regulatory value. A ratio below 1.0 suggests the market is skeptical about Snam's ability to earn its allowed returns or is pricing in regulatory risk. A ratio above 1.0 implies market confidence in earnings quality and growth optionality from energy transition investments.
3. LNG Utilization Rate
With regasification capacity set to reach 28 bcm/year following Ravenna's commissioning, utilization rates will indicate whether Italy's infrastructure build-out matches actual demand. High utilization supports the energy security thesis; low utilization validates bear case concerns about overbuilding. LNG now accounts for over 30% of Italy's gas imports, a 32% increase compared to the first half of 2024.
XIII. Conclusion: The Long View
Snam's story is, in many ways, the story of European energy itself—from post-war reconstruction through liberalization, from state control through market opening, from Russian dependence through emergency diversification, and now toward an uncertain but potentially transformative energy transition.
The company benefits from assets that cannot be replicated, regulatory frameworks that provide earnings stability, and geographic advantages that make Italy a critical node in European energy flows. The 2022 crisis demonstrated both the strategic importance of gas infrastructure and management's ability to execute under pressure.
Yet the long-term question remains unresolved: Is Snam investing in the infrastructure of the future, or polishing the assets of the past? The hydrogen bet is large, but the ultimate payoff depends on factors—technology costs, policy choices, global energy markets—that no company controls.
For investors, Snam offers a distinctive combination: the defensive characteristics of a regulated utility combined with optionality on the energy transition. The approximately 5% dividend yield provides current income; the hydrogen and CCS investments provide growth exposure; and the core regulated business provides downside protection.
As Enrico Mattei understood seventy years ago, controlling the pipes that move energy is controlling the economic destiny of nations. Whether those pipes carry methane, hydrogen, or something not yet imagined, Snam has positioned itself to remain at the center of that destiny. The next decade will reveal whether that positioning proves prescient or premature.
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