March 19, 2020 / 4:13 PM / 16 days ago

Italy's Snam takes steps to guarantee gas flows during coronavirus outbreak

MILAN, March 19 (Reuters) - Italian gas grid operator Snam has put in place emergency measures to ensure it can keep gas flowing during the coronavirus outbreak.

The state-controlled group, which manages the national grid from a centre in Milan, said it had put into action a maximum security protocol to run its operation in two-week shifts.

“Before the start of the shift, the whole team is tested to ensure they are COVID negative, and then placed into isolated accommodation near the dispatching centre, where they work and live safely 24/7 for 14 days before being relieved by another shift,” Alvera said.

Italy is currently tackling the worst coronavirus outbreak in Europe and there has been concern about the risks for key energy facilities should the crisis persist.

The epidemic, which has already claimed almost 3,000 lives in Italy, is expected to push the country into its fourth recession in just 12 years and batter company balance sheets.

Snam, Europe’s biggest gas pipeline company, said it had halted work at around half its construction sites in Italy and delayed investments.

“We remain broadly on track on our main (construction) milestones but we may need to cut the number further down as we progress,” Snam CEO Marco Alvera said in a conference call.

Snam, which makes most of its revenue from its regulated gas transport business in Italy, has pledged to spend 6.5 billion euros ($7 billion) to 2023, most of it on its transmission grid.

The group, which runs almost 42,000 kilometres of grid, also owns gas storage operations, LNG terminals and pipeline assets abroad including a 20% stake in the giant TAP pipeline that will bring Azeri gas to Europe.

“I can confirm startup of TAP by the end of 2020,” Alvera said.

Alvera said the group was actively in contact with the main gas shippers in Russia, Libya and Algeria to monitor possible risks to the supply chain caused by the coronavirus outbreak.

Italy imports around 90% of its gas demand and relies on imports from Russia to help fire its power plants.

Snam, which is targeting net profits this year of 1.1 billion euros, said it was hard to accurately estimate the impact of the coronavirus but said it expected only a minor impact on its 2020 results.

“It will be limited - single digit at this stage,” Alvera said.

The CEO, a former manager at oil and gas group Eni, said the group’s financial position was solid and it did not expect any impact on shareholder returns.

“Our dividend policy is sound and I don’t expect any change whatsoever,” Alvera said.

$1 = 0.9264 euros Reporting by Stephen Jewkes; Editing by Kirsten Donovan

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