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First of new Italian ATEM gas distribution zones awarded to A2A

London — Milan-based utility A2A has won the concession to supply more than 830,000 points of supply with natural gas for a period of 12 years in the first official award of Italy's new gas distribution zones, or ATEMs.

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In a note on its website, the group said its Unareti subsidiary was notified by the Milan City Council that it won the ATEM Milano 1- City, which covers the populations of Milan, Baranzate, Bollate, Cinisello Balsamo, Corsico, Novate Milanese and Sesto San Giovanni, with an overall score of 98.12 points from 100. There are three other ATEM zones serving Italy's second largest metropolitan city which are yet to be awarded.

The award covers a 12-year period and has a value of Eur1.37 billion ($1.59 billion), A2A said, without saying when the concession would start.The Milan 1 ATEM is Italy's second-largest behind Rome 1.

The process of consolidating Italy's existing fragmented gas distribution market into larger zones has seen numerous delays and administrative setbacks.

The first tender notices for the 177 new territories were issued in 2015 to redistribute Italy's 20 million gas users and annual gas consumption of around 80 Bcm.

Only a handful of them have proceeded to auction thus far, however.

The procedure could see the number of operators in Italy's gas system fall from 226 at the end of 2016 to "low double digits" by 2020, according to an estimate by the largest distributor Italgas.

--Fabio Reale, fabio.reale@spglobal.com

--Edited by Jonathan Fox, jonathan.fox@spglobal.com