Italian energy company Snam has signed a deal with BW LNG for the purchase by Snam Group of a floating storage and regasification unit (FSRU), increasing the country’s energy security during a time when Europe’s gas supply has been disrupted by the ongoing Russia-Ukraine conflict.

Announced yesterday (6th July), the US$400m purchase will see Snam taking full ownership of the FSRU ‘BW Singapore’, a facility which has a maximum storage capacity of about 170,000m3 (cubic metres) of liquefied natural gas (LNG). 

Also equipped with a nominal continuous regasification capacity of around 5bnm3 per year, the unit can also operate as a carrier for the transport of LNG. 

Stating that the purchase contributes to Italy’s energy security and diversification, Stefano Venier, CEO, Snam, said, “The two FSRUs acquired in the last month by Snam will contribute 13% of the national gas demand alone, bringing regasification capacity to over 30% of demand, as soon as we will get the permits to positioning them and get them connected to the national transmission network.” 

Currently positioned in the upper Adriatic Sea, the vessel’s position will allow the new unit to intercept potential new LNG flows from North Africa and the Eastern Mediterranean. 

The new FSRU is scheduled to start operations in third quarter of 2024 following completion of the authorisation and regulatory process, in addition to works relating to the unit’s connection to the gas network. 

Commenting on the agreement, Yngvil Asheim, CEO, BW LNG, said, “We are pleased to work with Snam to help Italy and Europe Diversify its gas infrastructure and contribute to energy security when BW Singapore’s current contract expires in November 2023.” 

“A cornerstone of this strategy is our FSRU segment, where we will continue to explore growth opportunities. We also have four LNG carriers on order for delivery in 2025.” 

With many parts of Europe having relied on Russia for up to 40% of its gas supply, countries have sought to increase energy independence and diversity since the start of the ongoing Russia-Ukraine conflict. 

Over recent months countries such as Greece, Lithuania, Germany, and the UK have strengthened their respective energy security by undertaking FSRU-related operations or delivering support packages that aim to drive homegrown energy technologies.