Italy's Snam to boost capex 14% with 'hydrogen-ready' focus

Barcelona — Italian gas infrastructure operator Snam said Nov. 25 it would increase its capital expenditure by 14% through 2024 as it continues to shift its focus toward preparing for a hydrogen economy, among other decarbonization projects.

The company said total investment will be Eur7.4 billion in the 2020-2024 period, of which Eur6.7 billion will be spent on regulated energy infrastructure, focused on hydrogen-ready replacements, digitalization, decarbonization and the supply of gas to the island of Sardinia.

Around 50% of that total will be for creating a "hydrogen-ready" infrastructure, or the replacement and development of new assets with hydrogen-ready standards, the company said.

Initially this would involve upgrades to around 1,200 km of the grid.

The company will also invest Eur150 million in initial projects for the conversion of railway lines and the installation of fuel cells in its networks as well as the launch of the first hydrogen distributors.

"Green hydrogen is expected to become competitive in a few years in various sectors. The most efficient way to transport green hydrogen is through the gas infrastructure," it said, estimating that at a European level, retrofit costs would be around 10%-25% of those for newly built pipelines.

Snam said it would benefit from 70% of its infrastructure assets already being hydrogen-ready while the company said it will develop positions upstream and downstream of its infrastructure, both in hydrogen and in biomethane, having already signed a number of partnerships and agreements with industrial players.

Its other grid investments in the coming four years, which would also be "hydrogen-ready", include the conversion of eight compression stations into gas/electric hybrid, and the construction of the virtual pipeline in Sardinia and the first sections of the network.

The company has already trialed its first hybrid turbine with hydrogen at a volume of 10%, which will be installed in 2021 at the Istrana plant, and tests are currently underway to verify the maximum quantity of hydrogen that can be introduced into the turbines and compressors, it said.