A future without coal is inescapable but still far from being achieved
Eni, Enel, SNAM's CEO and other top players operating in this sector met at the Annual Energy Summit arranged by Il Sole 24 Ore to debate about decarbonisation and natural gas
Although decarbonisation target has been set in Italy and globally, this long-term scenario will undoubtedly require decades to be achieved, meanwhile, we would take big risks if we believed that coal could disappear in a day.
However, this enduring process will definitely be supported by an increasingly available clean energy source: natural gas.
Major domestic players operating in this sector gathered at the 17th Italian Energy Summit arranged by Il Sole 24 Ore.
After the opening speech from Guido Bertoni, President of the Italian Authority for Electricity Gas and Water, who recalled how within this sector, 'diversity' means value, Xavier Villard, Managing Director at Accenture Strategy, illustrates current oil&gas scenario: “Low oil prices already affected profit margins of several companies, however big oil corporations went countertrend by cutting costs, selling assets and negotiating merger-deals (i.e.: recent sale of Maersk Oil to Total for over 7 billion dollars); particularly due to their low indebtedness these companies were easily allocated new funding while assets appraisal appealed both buyers (half of which are Asian) and sellers”.
Meanwhile domestic companies are undergoing extremely tough crisis “Technip, Saipem and others - Villard said – offer higher capacity compared to current demand”.
Although, as occurred in other business segments, mergers and acquisitions will continue being reported on the daily planner, not all players agree to follow this path: “ We grew through our discoveries (Zohr mega gas field in Egypt and Coral South in Mozambique) not through acquisitions” pinpoints Eni's CEO Claudio Descalzi.
The helm of the 'six-legged-dog' illustrates how the group changed its mission: “from a company operating in the oil&gas sector we turned into an energy producer and are currently betting on renewable energies that will shortly have a substantial impact on Eni's Ebitda”.
Despite their commitment towards 'clean' sources, Descalzi believes that coal “can't be cancelled in one day.
Decades will be needed and we mustn't forget that over 1 billion people globally lack access to electricity. For the time being we can't give up any of the available sources, but need to find the right energy mix to support sustainable production and bet on decarbonisation as progressively achievable goal”.
Enel CEO Francesco Starace backs up Descalzi statements, while his peer at SNAM, Macro Alverà, underlines the key role played by natural gas along this path: “Domestic heating systems make use of gas, which halves the cost of electricity, it's decidedly replacing coal which can be completely tossed aside, as showed in Britain ”.
“Only 10 years ago – recalls SNAM's CEO - we thought that gas supplies would have covered maximum twenty years, conversely, after the discovery of shale gas and the new fields in the Mediterranean and Africa, we'll have stocks for at least 400 years”.
According to Alverà, major problem relates to price fluctuation: “The US turned into LNG exporter charging lower price than Europe, thus, in order to compete with them, a European Energy Union should be established”.
USA's commitment as natural gas exporter could hurt Qatar, global leader in this sector, however the Arabic country doesn't seem to be concerned about the new scenario, as confirmed by Abdullah Bin Hamad Al-Attiyah, ex Prime Minister and Minister for Energy and Industry of Qatar, also attending the summit: “Should USA's commitment as European gas supplier cut down our market share, we'll focus on the Middle East. Those countries have poor gas supplies and a soaring demand. We are increasing our domestic production supported by new fields and are ready to tackle new challenges”.
Furthermore, continues Qatar Minister, “we deploy the most innovative gas carriers existing on the market thus granting great transport feasibility which is a remarkable competitive advantage”.
Qatar is still the main gas supplier to Italy – particularly through Rovigo regasificator, controlled by Adriatic LNG, 22% participated by Qatar Petroleum, that will soon receive gas from Azerbaijan through the Tran-Adriatic Pipeline.
“The new infrastructure – illustrates Luca Schieppati, Managing Director for Italy at TAP (20% controlled by BP; 20% SOCAR; 20% SNAM; 19% Fluxys; 16% Enagás; 5% Axpo), will bring the Caspian natural gas to our country through Greece and Albania and this new energy source will expand our supplies in compliance with SEN 2017 major targets”.