Lossmaker Edison Advances Small-Scale LNG
Leading Italian utility Edison has reported another loss-making year in 2017, owing primarily to asset writedowns chiefly upstream, but it is progressing its small-scale LNG project at Ravenna. Edison is a subsidiary of French giant EDF and its main upstream and Italian utility business.
Italian news agency Ansa reported that Italy’s ministry of economic development gave its 'Via' final go-ahead February 13 to Edison and its Italian partner PIR to jointly develop a small-scale LNG terminal with 20,000 m3 storage capacity at Ravenna on Italy’s east coast; the project, expected to serve the marine bunker market, would cost €80mn ($100mn) to develop. Edison had not provided further details to NGW at going to press.
Edison agreed in October 2017 to divest its stake in Adriatic LNG, a much larger offshore LNG import terminal in the same area, plus associated pipes to Italian gas grid operator Snam.
Edison said February 15 that its 2017 net loss was €176mn, compared with a loss of €389mn in 2016. It blamed volatility in its commodity and currency hedging, but also €169mn of impairment charges against its (North Africa and Italy) upstream assets.
Revenues declined by 10% to €9.94bn in 2017 (down by €1.1bn), owing chiefly to a fall in Edison’s power sales. This was despite what it said was a 2% increase in Italy’s overall electricity demand and a 6% increase in gas demand to 74.7bn m³. Volumes may rise in 2018 with Edison's announced deal to buy marketer Gas Natural Vendita Italia and its Shah Deniz import contract for a combined €293mn, which was cleared by the EU earlier this month.
Edison had three other positive news points too. Its upstream pre-tax adjusted earnings (Ebitda) increased by 26% to €637mn, as prices rose and it sold more. The Reggane Nord field in Algeria, in which it has an 11.25% interest, started up two months ago and should plateau at 2.9bn m³/yr gross. And Edison’s net debt shrank from €1.06bn at end-2016 to €116mn at end-2017