Italgas to complete Greek gas grid deal in July, boost spending

MILAN, June 15 (Reuters) – Italgas (IG.MI) expects to complete the acquisition of Greece’s DEPA Infrastructure in July, Chief Executive Paolo Gallo said on Wednesday as Italy’s biggest gas distributor pledged to ramp up investments.

The group, which runs around 74,000 kilometres (46,000 miles) of regulated gas pipelines, said it would invest 8.6 billion euros ($8.93 billion) to 2028 to complete the upgrade of its domestic Italian network and to modernize the gas grid in Greece.

In its previous business plan, Italgas had earmarked 7.9 billion euros of capital expenditures.

The business plan to 2028 earmarks 4.5 billion euro investments for Italy and 1.8 billion for Greece by 2028. M&A opportunities could be grabbed, Gallo added.

The group, which last year reached a deal to buy the Greece’s DEPA Infrastructure for 733 million euros, said it would consolidate the Greek rival in the last four, five months of this year.

Russia’s invasion of Ukraine has sent European countries scrambling to reduce their dependence on Russian gas.

In its multi-year strategy for its RePowerEU proposal, the European Commission has indicated that renewable gases, biomethane and hydrogen, will have to replace about 50% of the amount of gas that the bloc imports from Russia.

To help Italy to boost use of new gases, Italgas aims to make its grid more flexible.

“The largest share of the investments is destined for the extension, digital transformation and repurposing of the distribution network in order to create … the conditions for the widespread use of the new gases, such as biomethane, green hydrogen and synthetic methane,” Gallo said.

In its long-term strategy, the group said it expects sales this year to exceed 1.4 billion euros, up from 1.37 billion euros in 2021. It sees adjusted core earnings of 1-1.03 billion euros excluding the contribution of DEPA Infrastructure. The debt was expected to grow to 5.9 billion euros.

Italgasplans to reach net zero carbon emissions by 2050.

($1 = 0.9627 euros)

Reporting by Francesca Landini and Giancarlo Navach, editing by Cristina Carlevaro, Keith Weir and Marguerita Choy

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