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Gas area

Legislative/Regulatory Framework

Authority for Electrical Energy and Gas (AEEG) resolutions no. 248/2004,134/2006 and 79/2007.

With resolution no. 79/2007 regarding "Re-calculation of the economic supply conditions for the period falling between 1 January 2005 and 31 March 2007 and criteria for updating the natural gas supply conditions", the conditions for curtailing the uncertainties that particularly characterised the wholesale market in 2005 and 2006 regarding calculation of the sale prices of the gas intended for the protected market were in actual fact created. These uncertainties came about owing to the administrative cases brought by the operators, particularly with regard to resolutions no. 248/2004 and 134/2006.

  • GAS RELEASE ENI 2
    With its measure no. 16530 dated 6 March 2007, the Italian Anti-Trust Authority (IAA) made the obligations Eni Gas & Power proposed to actuate a new two-year gas release for an amount of 2 billion cubic metres/year mandatory. Eni's proposal was aimed at mitigating/preventing any possible IAA sanction following the proceedings currently in progress to verify alleged abuse of a dominating position in operating the Panigaglia re-gasification plant.
  • 2007-2008 WINTER GAS EMERGENCY
    In August, the Italian Ministry of Economic Development adopted specific measures which envisage the operator's obligation to maximize imports and for STOGIT to maximize stock volumes, with the intention of implementing action in advance so as to reduce the risk of a possible gas emergency in the following winter months. Incentives for interrupting industrial users were also envisaged.

 

Significant Events

  • MANAGEMENT OF THE UNUSUALLY MILD 2006-2007 WINTER
    In the early months of 2007, the exceptionally mild winter surely had a significant impact and gave rise to widespread gas surpluses throughout Europe hence a fall in prices. In short, many operators found it difficult, if not impossible, to treat the gas accumulated in storage reservoirs with ensuing damages resulting from reduced sales and the devaluation of any gas left over.
    In the case of Hera Trading, a shrewd management of position based on the early acquisition of the summer market totalling more than 50 million cubic metres starting from the second quarter of 2007 in actual fact reduced a potential significant negative impact on the financial statements to a physiological level.
  • 2007-2008 THERMAL YEAR STORAGE CAPACITY
    During March, the contracts with Stogit and Edison Stoccaggi for the modulation storage service for the 2007-2008 thermal year were renewed.
  • GAS RELEASE ENI 2
    During the second quarter, Hera Trading Srl - also with the support of Hera Comm Srl - took part in the award procedure for the sale of natural gas volumes in the period covering 1 October 2007 - 30 September 2009 actuated by ENI Gas & Power pursuant to Italian Anti-Trust Authority provision no. 16530 of 6 March 2007, acquiring 3 lots for a total of 120 million cubic metres/year.
  • FINALISATION OF NEW PROCUREMENT CONTRACTS
    In May a new contract lasting from June 2007 to September 2008 for a total of 415 million cubic metres of Russian gas was finalised. In June contracts expiring were renewed for another 180 million cubic metres/year upon acquisition via auction of transport capacity over Transitgas.
    Still in May and June, upon purchase via auction of the relevant capacity, spot contracts were finalised for the importation of summer gas for a total of 65 million cubic metres.
    In October winter transport capacity over the Transitgas pipeline was then acquired (November 2007-March 2008). It is used for spot winter procurement transactions concerning the weather trend actually recorded and for brokerage activities with third-party operators.
  • CONTRACT RENEGOTIATION PURSUANT TO RESOLUTION NO. 79/2007
    In compliance with the provisions of the cited resolution no. 79/2007, in June 2007 Hera Trading Srl renegotiated contracts in force in the period of 1 January 2006 - 30 June 2006 for both procurement and sale. In detail, the gas release contract with Eni Gas & Power was renegotiated for procurement, and contracts with Hera Comm Srl, Aspes Gas Srl, World Energy and Entra were renegotiated for sale. As a result of these renegotiations, Hera Trading Srl found itself in the position to collect Euro 1,020,000 from Eni Gas & Power and to disburse Euro 1,304,000 to its customers Hera Comm Srl, Aspes Gas Srl and World Energy. On the other hand, confirmation of the amounts stated above remains subordinate to the positive conclusion of the administrative cases pending between the Authority for Electrical Energy and Gas (AEEG) and several operators as far as what has already been respectively collected and paid conditionally is concerned.
  • STOGIT'S DECLARATION OF FORCE MAJEURE
    As it had not received the envisaged permits from the Ministry for Economic Development regarding operation of the Settala storage reservoir in overpressure (operation done the previous year), in July 2007 Stogit declared itself to be in a state of force majeure and proportionally reduced the storage capacities already assigned to the operators. Afterwards, in September the Italian Ministry for Economic Development issued the permit, but at a lower level of pressure than requested. Stogit therefore was able to reassign - although only in part - the previously withdrawn capacities.
    For Hera Trading Srl this event entailed storage space reduced by 9% of what was originally assigned.
  • OPERATIONS ACTIVATION OF FLAME ENERGY AT THE VIRTUAL POINT OF EXCHANGE
    Operations of Flame Energy were activated on the Italian market in October. Its operations are currently restricted to the virtual point of exchange and will be extended to regulation and measurement stations starting with the next thermal year.