SNAM-TRANSMISSION TARIFFS (Start of the investigation)
PRESS RELEASE
The Italian Competition Authority - in light of the recently concluded fact-finding investigation into the natural gas sector and the dominant position held by Snam (Eni gas subsidiary) in the markets of gas transportation and primary distribution - ruled that transmission conditions contained in the agreement of December 19th, 1994, between Snam, Assomineraria and Unione Petrolifera constituted an abuse of dominant position.
Cost of transmission at the current conditions is in fact a great obstacle to the development of other operators working in the primary distribution independently of Snam.
The Authority also considered that the refusal of Snam topermit Assomineraria to extend gas transmission beyond the purposes provided for by Section 12 of Law no. 9/1991, in order to generate electricity or for self-consumption, was aimed at impeding or limiting market outlets or market access, in such a way as to violate Section 3 of Law 287/90.
Even if Section 12 of Law no. 9/1991 provides for the right of gas transmission only in the cases of specific purposes, the consequent obligation on Snam to transmit natural gas for such usages does not exclude, however, that other parties, conducting activities different from electricity generation and self-consumption, can access to the Snam's transmission network, through specific agreements.
Snam's refusal to licence gas transmission service to national gas producers may consist in the refusal to stipulate supply contracts by the dominant firm and can be seen as a Snam's strategic behaviour aimed at excluding upstream operators from the market of primary distribution.
Given the present structure of the market concerned, in fact, a national gas producer, except for the few provisions of Law no. 9/1991, is forced to sell gas to Snam. Natural gas produced by private operators, which were refused transmission by the Eni subsidiary, flows into Snam's transport network and increases its gas availability to supply national demand.
To this end, the Authority also decided to open a formal inquiry into the acquisition by Agip of an hydrocarbon deposit placed in the Adriatic sea and owned by TMF and Energon. The companies under investigation are Eni, Agip, TMF and Energon.
The Authority felt that the sale of the deposit could be induced by the high cost of transmission (transportation by third parties).