2022-26 Plan: €10 bn of investments
Snam’s new capex plan envisages a 23% increase in investments compared to the €8.1 bn of the 2021-2025 Plan, bringing them to €10 billion in the 2022-2026 period, mainly for the commissioning of two FSRUs, the construction of the Adriatic Line, and the upgrade and development of storage. Of this investments, €9 bn are intended for gas infrastructure.
Investments aligned to the European taxonomy amount to €3.6 bn, broadly in line with last year (€3.8 bn), mainly thanks to H2-ready replacements, investments to reduce CO2 emissions and investments in energy transition businesses.
The plan envisages approximately €450 mln of investments in SnamTec, the Group’s innovation and digitalisation programme that groups 52 projects into 4 main areas: security, asset resilience, process optimisation and activities to improve business sustainability.
Overall capex mix (%)
Investments: €10 bn
36% of capex aligned with taxonomy: breakdown (bn)
Investments: €3.6 bn
Transport: investments amount to €6.3 bn, compared to 5.4 billion in the previous Plan, including investments in upgrading the Adriatic Line (to enhance South-North flows), replacement of >1,000 km pipelines, net zero investments, technological innovation and network digitalization.
Storage: €1.3 bn to expand and upgrade storage sites (compared to 1.2 bn in the previous Plan), and for the first investments in Alfonsine new storage field (Ravenna).
LNG: €1.4 bn with a significant increase for the purchase of two floating regasification units and related infrastructure investments, and for Small Scale LNG infrastructures.
Energy transition: €1 bn to complete the development of our platforms in biomethane, decarbonization and energy efficiency.
GROWTH DRIVERS 2022-2026
In order to rebalance the energy trilemma on the three pillars of security of supply, sustainability and competitiveness, the system needs to develop the gas infrastructure along the entire value chain through increased flexibility and appropriate sizing, so as to strengthen its resilience in times of crisis. The energy transition must be accelerated by developing green gases and decarbonisation, energy efficiency and a greater use of digitalisation.
Snam is active along all three pillars of the energy trilemma through a strategy based on:
- Gas infrastructure development: investing along the entire value chain (by purchasing and commissioning two FSRUs, expanding and optimising the storage system, strengthening the Adriatic Line, developing small-scale LNG – midstream - and expanding LNG and bio-LNG station networks with an outlook on hydrogen)
- Energy transition and decarbonisation: developing green gases (hydrogen and biomethane) and contributing to decarbonising consumption by implementing energy efficiency measures and Carbon Capture and Storage (CCS) technology
- Digitalising and streamlining of assets and industrial processes.
A further component of value creation is represented by Snam’s portfolio of associates which recently registered the addition of a stake in the South corridor with Algeria (TTPC and TMPC). These associates have been grouped into clusters to reflect their role on the short and medium-long term strategic goals:
- assets “Value Enhancers” of the domestic infrastructure, with a connection to the Snam network in Italy. These companies contribute approx. 60% of the net income on equity investments expected by 2026
- assets “Enablers” of business optionality, which are not connected to Snam’s domestic network but offer market visibility as well as business opportunities and optionality on possible portfolio evolutions: French company Teréga, British company Interconnector and Emirate’s Adnoc
- Greater diversification of financing sources and instruments
- The use of more flexible debt instruments, also benefiting from the strong long-term relationship with major national and international banks
- Maintain credit ratios, both flow (FFO/Net Debt) and stock (Net Debt/Fixed Assets including associates) consistent with current metrics of current credit ratings
- Maintain a mix of fixed and variable rate debt of 2/3.
The weight of sustainable finance operations is expected to increase to around 80% in 2026 from around 70% at the end of 2022, assuming that all future Snam bond issues are in ESG (Sustainability-Linked-Bonds or Use of Proceeds) format.
With regards to the capital allocation strategy, the implementation of the investment plan together with the maximisation of the value of assets (from associates) remains a priority. Snam could consider an asset rotation optionality for those considered “non-strategic” to be used for possible non-organic growth.
Snam confirms its commitment to guarantee to shareholders an attractive and sustainable remuneration and the payment of an interim dividend. The growth of the dividend per share of 5% in 2022 is confirmed, minimum growth of 2.5% in 2022-2025 extended to 2026.
Despite the uncertain backdrop, the 2022 economic results have shown the solidity of the Group and this allows us to propose a final dividend of 0.1651 euros per share at the Shareholders’ Meeting on May 4th, which will be paid from June 21st, 2023 (record date June 20th, 2023) with an ex-dividend date of June 19th, 2023. The dividend for the financial year 2022 is therefore 0.2751 euros per share, of which 0.1100 euros per share were distributed in January 2023 as an interim dividend.
Vision to 2030
We expect more than 20 billion euros worth of investment opportunities in the 2022-2030 period for:
- the continuation of the development, maintenance, modernisation, decarbonisation and digitalisation of infrastructure
- the completion of the Adriatic Line and the development of new storage capacity (+15% with Alfonsine)
- the development of the “Italian Hydrogen Backbone” by repurposing infrastructure (networks and storage) to support green gas domestic demand and import/export excess domestic capacity.
17 March 2023 - 13:10 CET