Snam SpA Secures Exclusivity Agreement with Higas to Expand LNG Capabilities

Snam SpA, Italy’s leading natural‑gas transmission and infrastructure operator, has entered into an exclusivity agreement with Higas, the owner of a liquefied natural‑gas (LNG) coastal storage facility located in Oristano, Sardinia. The deal is a pivotal step toward Snam’s broader strategy of converting the existing storage complex into a full‑scale regasification terminal.

Strategic Rationale

Snam’s long‑term objective has been to strengthen its position in the European LNG market by adding upstream and downstream assets that complement its established midstream network. The Oristano site offers a strategic geographic advantage—proximity to the Mediterranean shipping lanes and to Italy’s growing LNG import demand. By converting the facility, Snam would be able to:

  • Increase import capacity – enabling the company to receive larger LNG volumes from global suppliers such as Qatar, the United States, and Australia.
  • Diversify revenue streams – through the provision of regasification services to importers and distribution partners, thereby capturing margins that extend beyond transportation fees.
  • Enhance network resilience – adding an alternative supply point that can mitigate disruptions in the existing gas pipelines or port infrastructure.

The exclusivity clause ensures that Snam has first‑right access to the Oristano asset for a defined period, reducing competitive pressure while the conversion project progresses.

Market Impact

The announcement has had an immediate, positive effect on Snam’s equity valuation. Over the past several trading days, the company’s shares have risen by more than 1%, outperforming the broader FTSE MIB index. Market participants interpret the move as a signal of Snam’s commitment to expanding its LNG footprint, a sector that is increasingly central to Europe’s energy transition narrative.

Analysts note that the valuation premium is consistent with expectations that the Oristano terminal will contribute to a higher earnings‑before‑interest‑taxes‑depreciation‑amortization (EBITDA) margin through the capture of regasification fees and improved transmission economics. Furthermore, the deal aligns with the European Union’s Clean Energy Package, which encourages the development of diversified gas supply chains to reduce carbon intensity.

Competitive Positioning

In a landscape dominated by a handful of major LNG importers—such as Italy’s own Enel, Italy’s ENI, and Italy’s gas transmission operator SNAM—additional regasification capacity represents a significant competitive advantage. By adding a new terminal, Snam will:

  • Improve contractual leverage with gas suppliers by offering a larger and more reliable import pipeline.
  • Reduce exposure to price volatility through vertical integration, allowing the company to balance storage and transportation costs more effectively.
  • Position itself for future expansion into neighboring markets, such as the Mediterranean and North African gas corridors.

The Oristano terminal would also complement Snam’s existing LNG terminal in Ancona, providing redundancy and operational flexibility in case of maintenance or supply interruptions.

Economic and Regulatory Considerations

The Italian government’s support for LNG infrastructure is evident in its regulatory framework, which offers tax incentives and streamlined permitting processes for projects that enhance energy security. Snam’s investment is therefore likely to receive favorable treatment, both in terms of regulatory approvals and potential subsidies.

From a macroeconomic perspective, Europe’s energy markets are undergoing a transformation driven by decarbonization targets and geopolitical uncertainties. The Oristano terminal aligns with the continent’s strategic imperative to diversify natural gas supply sources, thereby enhancing energy independence and reducing reliance on single suppliers or transit routes.

Conclusion

Snam SpA’s exclusivity agreement with Higas marks a decisive step toward expanding its LNG infrastructure in Italy. By converting the Oristano storage facility into a regasification terminal, the company will strengthen its competitive positioning, enhance its revenue base, and support broader European energy security goals. The positive market reaction underscores investor confidence in Snam’s strategic direction and its capacity to execute large‑scale infrastructure projects that transcend industry boundaries.