Snam: Antitrust opens investigation into purchase of Edison Stoccaggio

The Antitrust Authority launches the preliminary investigation on the operation of 100% of Edison Stoccaggio by Snam. The opening of the path is made official by the same Authority headed by Roberto Rustichelli in the weekly bulletin, according to which it is necessary to proceed with "further investigative enquiries in order to assess whether the transaction under consideration is likely to significantly impede effective competition, pursuant to Article 6, paragraph 1, of Law no. 287/1990, also due to the strengthening of Snam's dominant position in the gas storage market". The proceedings must be concluded within ninety days from the date of the decision.

In the document published on the site, the Antitrust Authority makes a long preamble on the size of the storage market, affected by the transaction, and on the perimento of the deal which, it clarifies, would result in the elimination of Stogit's only current competitor and bring Snam's market share from [90-5%] to [95-100%], with an increase of [5-10%]. Following the transaction, Snam, through its subsidiary Stogit, will assume the role of monopolist in the storage market in Italy.

"It is therefore necessary to carry out an accurate competitive assessment of the market in question in order to verify the effects of the Transaction on the services offered to shippers who purchase storage capacity in the Italian market," writes the Antitrust Authority, "taking into due consideration the fact that competition in this market is already particularly weakened pre-transaction by the existence of a super-dominant operator.

The Antitrust Authority reports the observations of some shippers, according to which the transaction could have an impact on the quality of peak modulation storage. "Despite the fact that the minimum quality standards of the service provided are established by the sector regulations, for the same service, the quality of the peak modulation provided by Edison Stoccaggio seems to be higher than that of Stogit by virtue of a higher level of flexibility - the Authority observes -; this is because the service provided by Edison Stoccaggio allows gas to be injected and dispensed in a manner more adaptable to the shipper's needs, especially in the initial months of the supply period, also by virtue of a higher ratio between the injection/supply capacity and the space allocated".

It therefore emerges the possibility, writes the Authority, "that, downstream of the operation and with reference to the storage sites subject to acquisition, Snam may decide not to offer peak modulation at the same level of quality currently guaranteed by Edison Stoccaggio, considering also that Snam's incentives to invest in its infrastructures to increase the quality of the service offered could diminish, due to the disappearance of the only current competitor". Hence, therefore, the Authority's need to gather further information on the transaction that the group led by Stefano Venier closed last July.