Health Safety Environment 2004 - Snam · 2011. 11. 30. · Cover: Lorenzo Mattotti, Il garante. Health Safety Environment 2004 report. Note on Methods Snam Rete Gas’s Health Safety

Health Safety Environment 2004 report

Piazza Santa Barbara, 720097 San Donato Milanese - MilanoTel. +39 02 5201www.snamretegas.it

Cover: Lorenzo Mattotti, Il garante

Health Safety Environment

2004report

Note on MethodsSnam Rete Gas’s Health Safety Environment Report for

2004 has been prepared using the guidelinesrecommended by the Environmental Reports Forum,

promoted by the Eni Enrico Mattei Foundation, and thoserecommended by the GRI (Global Reporting Initiative).

The Forum, in which companies, environmental groups,representatives of the public administration,

entrepreneurial organisations and other institutionsparticipated, established guidelines for drawing up

environmental reports. The Global Reporting Initiative(GRI) is an international project that involves

representatives of industries, NGO’s (Non-GovernmentalOrganisations) and UNEP (United Nations Environment

Program), with the goal of stimulating and promotingstandardised approaches for gathering data and drawing

up Sustainability Reports.

The report illustrates all the activities performed inconnection with the natural gas transmission and

dispatching services provided by Snam Rete Gas S.p.A. andthe LNG re-gasification service provided by GNL Italia S.p.A.

The methods used to prepare the report may be improvedand the data may be revised to take into account new and

more in-depth classification criteria.The reliability, completeness and uniformity over time of

the environmental and economic data included in thereport are ensured by a computerised procedure whereby

data are collected by all the operating units concerned andare processed and verified by the central unit in charge of

preparing the HSE report.To enable environmental performance to be compared

over time, the report provides data relating to natural gastransmission and the re-gasification of liquefied natural gas

activities for the period 2000 – 2004. These activities wereperformed by Snam until 30 June 2001 and since 1 July

2001 they have been performed by Snam Rete Gas.Health and safety performance is comparable from 2001,

the year when Snam Rete Gas started operating.

Health Safety Environment

2004report

contents Letter from the Chairman 4

Snam Rete Gas 6 Transmission and re-gasification system

Health, Safety and Environmental Policy 9

Natural gas and the environment 11

Health, Safety and Environmental 14 OrganisationManagement 15 UNI EN ISO 14001 Environmental Certification

15 Audits15 Legislation16 Environmental improvement programmes and targets17 Training18 HSE expenditure

Environmental protection 1920 Reduction of energy consumption21 Air protection24 Substitution of ozone-depleting substances25 Waste management25 Water consumption and waste water management26 Noise reduction26 Landscape protection27 Pipeline monitoring

Occupational health and safety 29 Activities and initiatives32 Accident prevention33 Safeguarding health

Commitment to sustainable development 3435 Our objectives35 Ethics and human rights36 Code of Practice

36 Human Resources36 Employment37 Training and professional development38 Union rights38 Initiatives for employees

38 Relations with the stakeholders38 Shippers and the Italian Electricity and Gas Authority39 Shareholders39 Community42 Suppliers

44 Breakdown of added value44 Internal and external communications45 Technological innovation and research46 Quality

GNL Italia 47

Performance indicators 50

Verification of the report 52

Corporate responsibility and the commitment towards sustainable development increating value for our shareholders and the community with due regard for the health,safety, environment and social contexts in which we work, have always been priorities forSnam Rete Gas when defining corporate policies and making investment decisionsregarding its operations.

With this HSE report, we are continuing our practice of providing annual informationabout the health, safety and environmental aspects of our activities, the aim being toencourage an open and constructive dialogue and strengthen our relationships with allinterested parties. The report is also a management tool because it enables us to verifythe progress made and to identify areas where there may be room for improvement.

In this year’s edition, we have placed greater emphasis on presenting our commitmenttowards sustainable development by creating value for the community and for investors,supplying quality services that meet the expectations of our customers, buildingconstructive relationships with the authorities, the community, shareholders andsuppliers, supporting the professional and social development of our employees andensuring research and technological innovation.

The report illustrates the programmes established, the measures adopted and the resultsachieved, with particular reference to: systems for managing health, safety and theenvironment; restoring land after laying new pipes; inspecting gas pipelines; installinglow-emission high-efficiency gas turbines; prevention and protection activities for thehealth and safety of employees; personnel training.

The activities undertaken, the investments made, the technological innovations and thecontinuous improvement of the procedures implemented have allowed us to achievepositive, concrete results.

letter from the chairman

SNAM RETE GASHEALTH SAFETY ENVIRONMENT

2004 REPORT

LETTER FROM THE CHAIRMAN

4


2004 REPORT

LETTER FROM THE CHAIRMAN

5

In recognition of our commitment, ISO 14001 certification of the environmentalmanagement systems in place at compressor stations and the LNG re-gasificationterminal was maintained and renewed following audits by the certification body.

The activities of natural gas transmission and the re-gasification of liquefied natural gasperformed by Snam Rete Gas provide a source of energy which has a low environmentalimpact and which, in 2004, satisfied approximately 34% of Italy’s energy requirements,thus making it possible to enhance energy efficiency, reduce polluting emissions andplay a part in achieving the reduction target set for greenhouse gas emissions in KyotoProtocol commitments. In 2004, the use of natural gas transmitted by our network inItaly, as an alternative to coal and petroleum products, prevented the emission into theatmosphere of approximately 84 million tonnes of carbon dioxide. We are aware of theimportance of our role in the energy and environmental context and we intend tocontinue to co-operate with the authorities, with our customers and with all partiesinvolved in order to assure our contribution towards improving the quality of theenvironment and towards sustainable development.

For us, the positive results achieved do not represent a finishing line, but act as a stimulustowards reaching for new goals, with continuous improvement as our objective.

ChairmanDomenico Dispenza

Snam Rete Gas belongs to the Eni Group and is responsible for natural gas transmissionand dispatching activities. It is currently the only provider of LNG (liquefied natural gas)re-gasification services in Italy.The company started operating on 1 July 2001 following the transfer of the above-mentioned activities from Snam S.p.A. (now Eni S.p.A.).Since 1 November 2001, the LNG re-gasification activities have been performed by GNLItalia which is controlled 100% by Snam Rete Gas.

MAIN FINANCIAL AND OPERATING DATA

2004 (million €)

Total revenue 1,809

Operating profit 969

Consolidated net income 526

Snam Rete Gas employees at 31.12.04 (no) 2,473

Transmission and re-gasification system

Natural gas is consigned to Snam Rete Gas at entry points located at interconnectionswith the import lines from Russia, Northern Europe and North Africa, with thePanigaglia LNG re-gasification terminal and with domestic gas production and storagecentres.

Snam Rete Gas


2004 REPORT

SNAM RETE GAS

6


2004 REPORT

SNAM RETE GAS

7

The gas is then transmitted, on the basis of instructions provided by the shippers, to7,000 delivery points connected to urban distribution networks and to major industrialusers and power plants.

The Snam Rete Gas transmission system consists of a pipeline network, extending overmost of Italy, with pipes ranging from 25 to 1,200 millimetres in diameter operating atpressures of between 5 and 75 bar. There are 11 compressor stations and 558 pressurereduction plants. As at 31 December 2004, the network was 30,545 kilometres long, anincrease of 425 kilometres compared with 2004.System management is controlled by the Dispatching Centre at San Donato Milanese incollaboration with operating centres distributed throughout Italy.The Dispatching Centre liaises closely with 8 regional operating centres which superviseand control the activities of 60 local units in charge of the operation, maintenance andmonitoring of the whole system. These units are responsible for ensuring that the network functions in compliance withspecific technical standards and with current legislation and regulations, guaranteeingthe required level of service, safety and environmental protection.

The gas transmission service on Snam Rete Gas’s network is regulated by the ItalianElectricity and Gas Authority on the basis of a “Network Code” that sets out provisionsgoverning all the rights and obligations of the parties involved in the service.

The volume of natural gas sent into the national network in 2004 totalled 80.4 billioncubic metres, an increase of 4 billion, or 5.3%, compared with the previous year. The demand for natural gas in 2004 in Italy amounted to approximately 80.3 billioncubic metres, a growth of approximately 3.8% when compared to 2003 which was due toincreased consumption in the electricity generating sector (+8.9%) with the start-up of anumber of gas combined-cycle power plants, and to the increased consumption ofnatural gas in the industrial sector (+3.4%).

1

2

34 5

9

10

11

1213

2

3

768

NATURAL GAS TRANSMISSION SYSTEM

1 Dispatching centre2 Natural gas fields3 Pipeline network4 Import points5 Compressor stations

6 Storage stations7 Underground storage8 LNG re-gasification (GNL Italia)9 Gas tankers

10 Pressure reduction plants

11 Industrial users and power plants12 Urban distribution networks13 Residential and commercial users

Snam Rete Gas

GNL Italia


2004 REPORT

SNAM RETE GAS

8

20

40

60

80

2000 2001 2002 2003 2004 2000 2001 2002 2003

20,000

24,000

28,000

32,000

2004

Volume of natural gas sent into the network (109m3) Length of pipeline network (km)

The average distance travelled by the gas in the pipeline network from the entry point tothe final delivery point amounted to 485 kilometres in 2004, in line with the 484kilometres of 2003.

At GNL Italia’s re-gasification terminal, located in the Fezzano di Portovenere district(province of La Spezia), liquefied natural gas (LNG) is unloaded from gas tankers andsent to storage tanks at a temperature of -160 °C. Subsequently, it is reconverted to thegaseous phase in a simple heating operation and sent into the gas pipeline network.In 2004, the liquefied natural gas re-gasification terminal sent approximately 2.1 billioncubic metres of gas into the network, a reduction of 1.4 billion cubic metres comparedto the previous year. This reduction was due to the effects of the accident at the liquefiednatural gas production plant in Skikda in Algeria, which reduced market availability ofliquefied natural gas.

TRANSMISSION NETWORK REGIONAL CENTRES

IMPORTS FROMNOTHERN EUROPE

IMPORTS FROM RUSSIA

LNG TERMINAL

National Network

Regional Network

LNG re-gasification terminal

Dispatching centre

Compressor stations

Marine terminal

Regional boundary

IMPORTSFROM ALGERIA

IMPORTSFROM LIBIA

MALBORGHETTO

ISTRANA

MASERA

RIMINI

TERRANUOVA B.

GALLESE

MELIZZANO

MONTESANO

TARSIA

MESSINA

ENNA

KEY

National Network

Regional Network

LNG re-gasification terminal

Dispatching centre

Compressor stations

Marine terminal

Regional boundary

NORTH-WESTNORTHNORTH-EASTCENTRE-WESTCENTRE-EASTSOUTH-WESTSOUTH-EASTSICILY


2004 REPORT

HEALTH, SAFETY AND ENVIRONMENTAL POLICY

9

In a policy of sustainable development, the health and safety of employees and thirdparties, and the protection of the environment, are prime and constant objectives forSnam Rete Gas, whose commitment is to bring about a continuous improvement in allits activities.

The principles underlying Snam Rete Gas’s HSE policy are to:

■ Use natural resources in a sustainable manner and prevent pollution;

■ Manage activities in compliance with the provisions of law, rules, regulations andcompany procedures containing integrations and improvements;

■ Aim for technological excellence to ensure levels of safety, environmental protectionand energy efficiency in line with the best international business practices;

■ Locate, design, construct, manage and decommission plants and conduct activitieswith proper regard for working and natural environments, adopting a preventiveapproach in order to protect the health and safety of employees and third parties;

■ Identify the health, safety and environmental hazards arising from ongoing and newactivities, assess the associated risks and take steps to prevent and manage them;

■ Establish procedures, alongside the preventive measures, in order to identify andrespond to emergencies and control the consequences of any accidents;

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2004 REPORT

HEALTH, SAFETY AND ENVIRONMENTAL POLICY

10

■ Train and inform employees, raise their awareness and involve them, so that they takepart actively and responsibly in the implementation of principles and the achievementof objectives;

■ Carry out, at different levels, environmental monitoring and periodic revisions andupdates of procedures, using audit and reporting systems which make it possible toassess performance and review objectives and programmes;

■ Inform employees, trade unions, the authorities and the general public aboutprevention programmes and the results achieved, maintaining a climate of co-operation with local, national and international authorities and associations;

■ Employ the services of qualified suppliers and contractors who can contribute tocontinuous improvement in health, safety and environmental standards;

■ Promote research and technological innovation to improve environmentalperformance and safety standards in the company’s activities;

■ Make available adequate resources to implement this policy.

The HSE policy was approved by the Chairman of Snam Rete Gas on 19 May 2004.


2004 REPORT

NATURAL GAS AND THE ENVIRONMENT

11

Natural gas can make a major contribution to improving the quality of the environmentbecause it can be transmitted in underground pipelines, because of its inherentchemical-physical properties and because it can be used in high-efficiency low-emissiontechnologies, not only in fixed installations but also as a vehicle fuel. To supply theenergy equivalent of 220 million cubic metres of natural gas per day – the averagequantity transmitted in Snam Rete Gas’s underground pipeline network in 2004 – a largenumber of road tankers (for petroleum products) and railway wagons (for coal) wouldhave to be used, causing problems due to the lack of adequate transport infrastructureand the high environmental impacts involved.

The emissions of sulphur compounds, particulate, aromatic hydrocarbons and harmfulmetal compounds produced by natural gas combustion are negligible. Nitrogen oxideemissions, too, are generally lower than those produced by the combustion of otherfuels.An increase in the use of natural gas as an alternative to petroleum products and coal,which emit larger quantities of CO2, is one of the most promising and feasible optionsfor reducing CO2 emissions. Natural gas can play an important role in achieving thetarget set for Italy in the Kyoto Protocol, which is to reduce greenhouse gas emissions by2008-2012 by 6.5% compared with the 1990 figure.

The combustion of natural gas produces 25-30% less carbon dioxide compared withpetroleum products and 40-50% less compared with coal, for the same energy input.Emissions per unit of energy output can be further reduced by using natural gas in high-efficiency applications and technologies, such as condensing boilers, cogenerationplants and combined cycle plants for electricity generation. A gas-fired combined cyclewith a 56-58% energy efficiency, compared with the approximate 40% efficiency of

natural gas and the environment


2004 REPORT


conventional steam cycles, can reduce CO2 emissions by 52% compared with a traditionalplant powered by fuel oil and by 62% compared with a coal-fired plant.

Natural gas also has the edge on other fossil fuels as regards the reduction of greenhousegas emissions, even taking into account the emissions of methane, the main componentof natural gas, from extraction to end use.

Life cycle analysis shows that, in electricity generation, the total greenhouse gasemissions -expressed as CO2 equivalent - in the life cycle of natural gas are 53-65% lowerthan in the coal cycle and 47-60% lower than in the oil cycle. The ranges shown for thepercentage reductions reflect differences in the activities included in the life cycle and inthe sources of information.

FUEL TRANSPORT

Fuel

Natural gas220 *106 m3/day

Petroleum products191,000 t/day

Coal299,000 t/day

5,860railway wagons

per day

5,150road tankers per day

1underground network

Means of transport

200

400

600

800

1,000

1,200

Italiangas

Russiangas

Oil Coal

End use Other stages

CO2 e

q (g

/kW

h)

Greenhouse gas emissions in the life cycle of fossil fuels usedto generate electricity

12


2004 REPORT


13

Natural gas is mainly composed by methane (CH4), by small quantities of higher hydrocarbons,nitrogen and carbon dioxide, in different percentages depending on the origin; therefore it iscommonly called "methane".It requires a minimal treatment from the extraction to the delivery to the final user.

Composition and average characteristics of the natural gas used in Italy - 2004

THE CHARACTERISTICS OF NATURAL GAS

In 2004, the use of natural gas in Italy as an alternative to coal and petroleum products inpower stations, in industrial plants and in the residential/commercial and automotivesectors prevented the emission into the atmosphere of approximately 84 million tonnesof carbon dioxide, 660,000 tonnes of sulphur oxides, 144,000 tonnes of nitrogen oxidesand 47,000 tonnes of particulate.

PARTICULATE -47

EMISSIONS AVOIDED

Estimate of emissions avoided in Italy in 2004 thanks to the use of natural gas (103 t)

NITROGEN OXIDES-114

CARBON DIOXIDE -84,000

SULPHUR OXIDES-660

Natural gas Northern Europe Russia Italy Algeria Libia% vol. % vol. % vol. % vol. % vol.

Methane 90.06 97.78 99.37 84.63 86.25

Ethane 4.82 0.89 0.05 8.11 9.84

Other hydrocarbons 1.58 0.42 0.01 2.55 1.84

Carbon dioxide 1.21 0.09 0.03 0.62 1.56

Nitrogen 2.3 0.81 0.53 3.94 0.42

Helium 0.03 0.01 0.01 0.15 0.09

Higher Heating Value

(MJ/Sm3) 38.897 37.978 37.594 40.021 40.949

Lower Heating Value

(MJ/Sm3) 35.101 34.211 33.848 36.164 36.998

Organisation

Occupational health and safety and environmental protection have always beenpriorities for Snam Rete Gas when defining corporate policies and making investmentdecisions regarding its operations. The company’s Health, Safety and Environmentalpolicy, its HSE Committee and a dedicated unit responsible for defining, scheduling andmonitoring improvement plans relating to occupational health and safety andenvironmental protection are tangible evidence of these priorities.

The HSE management system implemented by Snam Rete Gas is based on in-houseorganisational regulations which establish departmental and individual responsibilitiesand the procedures to be followed in the planning, construction, operating anddecommissioning stages pertaining to all company activities, the aim being to ensurecompliance with the law and with corporate HSE policy.In the Snam Rete Gas organisational structure, unit managers are required to takeresponsibility for the health, safety and environmental aspects of the activities lyingwithin their province.

The environmental management systems in place at gas compressor stations and theliquefied natural gas re-gasification terminal have achieved UNI EN ISO 14001certification and the occupational health and safety management system has beendeveloped in compliance with the BS 8800 standard.

38 members of staff in the main office units and in operating units are dedicated full-timeto activities concerning environmental protection and occupational health and safety.

health, safety and environmental management


2004 REPORT

HEALTH, SAFETY AND ENVIRONMENTALMANAGEMENT

14


2004 REPORT


15

UNI EN ISO 14001 Environmental Certification

The environmental management systems in place at gas compressor stations and theliquefied natural gas re-gasification terminal are certified to UNI EN ISO 14001.This certification is valid for 3 years during which time audits are carried out by thecertification body every nine months.In 2004, DNV Italia (Det Norske Veritas) confirmed certified status after carrying out thefollowing audits:■ Enna compressor station, audit to renew certification, January 2004■ Messina compressor station, audit to renew certification, January 2004■ Tarsia compressor station, audit to maintain certification, October 2004■ Montesano compressor station, audit to maintain certification, October 2004■ Melizzano compressor station, audit to maintain certification, October 2004■ Liquefied natural gas re-gasification plant, audit to maintain certification, July 2004

At the end of 2004, Snam Rete Gas’s top management reviewed the corporateenvironmental management system in order to verify its adequacy and effectiveness andapproved the new environmental programme for 2005.

The activities initiated in 2003 continued during the year with a view to introducing anISO 14001 compliant environmental management system for the gas pipeline network.

Audits

To verify the correct implementation and effectiveness of the environmental and safetymanagement systems in place and identify areas susceptible of improvement, as well asverifying compliance with the law, routine internal audits are carried out. The auditing activities are performed by a team of suitably trained/qualified people. Inparticular, the head of the audit team is a qualified auditor or a person with equivalentexperience. When necessary, in addition to routine internal audits to ascertaincompliance with management systems, targeted audits are carried out to assess specifictechnical-operating situations and identify appropriate improvements.In 2004, a total of 45 audits were performed, involving all the compressor stations, theliquefied natural gas re-gasification terminal, maintenance centres and corporate offices.Of these audits, 42 were carried out by an internal team and 3 by an external team.

Legislation

Snam Rete Gas’s activities are subject to European, national and local environmental andsafety legislation, international agreements and control and authorisation procedures.There are dedicated units in the company’s organisation which:■ collect and update the legislative framework, identifying the regulations that apply to

the company’s activities and arranging for their analysis and dissemination to theoperating units and offices concerned;

■ file all deeds of authorisation and plan their updating;■ prepare specific procedures for the implementation of legislation and regulations;■ verify compliance with regulations and authorisations.

In 2004, Snam Rete Gas was neither fined nor sanctioned for any violation of legislationon health, safety and the environment.


2004 REPORT


16

Environmental improvement programmes and targets

With a view to continuous improvement and in the framework of the environmentalmanagement system for compressor stations, environmental programmes include thefollowing objectives and targets:

Objectives and targets achieved in 2004

Objective Target

- Reduce atmospheric emissions Replacement of heat generators in 2 stationsof combustion products

- Reduce energy consumption

- Reduce energy consumption Installation of remote-monitoringand diagnostics programs on 6 units

- Eliminate ozone-depleting substances Installation of 2 fine water spray fire-extinguishingsystems to replace systems using NAF S III

- Reduce nuisance caused by lighting Modification of lighting systems in 2 stations

- Prevent environmental pollution Installation of new fire-extinguishing systemson vents at 2 stations

- Improve waste management Installation of dedicated underground tanksat the Malborghetto and Istrana stationsfor collection of industrial waste water

- Reduce noise Replacement of sound-absorbing insulationon flue-gas stacks of 3 compressor units

- Improve reliability of low-emission turbines Use of new combustion technologieson 2 PGT25-DLE compressor units

- Reduce atmospheric emissions Conversion of 2 compressor unitsto low-emission type (DLN)

Work in progress

Objective Target

- Reduce atmospheric emissions Replacement of heat generators in 2 stations, of combustion products by 31/12/2005

- Reduce energy consumption

- Reduce nuisance caused by lighting Modification of lighting systems in 7 stations,by 31/12/2005

- Prevent environmental pollution Installation of new fire-extinguishing systemson vents at 7 stations, by 31/12/2005

- Reduce atmospheric emissions of natural gas Installation of new hydraulic starter systemsfor 17 compressor units (PGT-25) to replacestarter turbines activated with natural gas,by 31/12/2008

- Reduce noise Replacement of sound-absorbing insulationon flue-gas stacks of 10 compressor units,by 31/12/2007

- Improve reliability of low-emission turbines Use of new combustion technologies on 7PGT25-DLE compressor units, by 31/12/2007

- Reduce atmospheric emissions Installation of 7 new low-emission compressorunits, by 31/12/2006Conversion of 2 compressor units tolow-emission type (DLN), by 31/12/2005


2004 REPORT


17

New objectives and targets in 2005 environmental programme

Objective Target

- Prevent accidental discharges Replacement of the oil seal systems with(surface and subsurface) the new dry seal systems on 4 compressor

units, by 31/12/2006

- Improve waste water management Installation of dedicated tanks for the collectionof industrial waste waters in the Terranuovaand Gallese stations and replacement of thecollection pipeline system to new networksin the Terranuova, Gallese, Malborghettoand Istrana stations, by 31/12/2006Preparation of a study to assess the constructionof new phyto-purification plants for thetreatment of domestic waste waters,by 31/12/2005

- Eliminate ozone-depleting substances Installation in a generator unit of a fire-extinguishing system that uses CO2 insteadof NAF S III, by 31/12/2005Replacement of air-conditioning systems withnew systems that are free of R22 in theTerranuova, Enna and Tarsia stations,by 31/12/2005Preparation of feasibility studies regarding theelimination, wherever possible, of R22 in allthe air-conditioning systems of 7 stations,and implementation of the identified measures,by 31/12/2006

- Reduce atmospheric emissions Replacement of heat generators for fuelof combustion products pre-heating in 2 units of 1 station,

- Reduce energy consumption by 31/12/2006

- Reduce noise Installation of new sound-absorbing hoodson the machine arms of 3 units, by 31/12/2005

- Improve waste management Realisation of new special areas dedicated to thetemporary selective storage of waste at 3stations, by 31/12/2005

- Reduce atmospheric emissions Installation of new separators for oil fumeson 26 units (PGT-25), by 31/12/2006

Training

Snam Rete Gas has always paid particular attention to all aspects of health and safety ofpersons and to the care of the environment, making an effort to promote a series of traininginitiatives aimed at spreading and developing abilities and knowledge of this subject.The main aim is that of enabling the staff to operate effectively in their workplace in fullrespect of health, safety and the environment through the participation in trainingcourses aimed at each professional figure.The training model that is used is based on differentiated training courses, and hassupplied training regarding safety, health, care for the environment, environmentalmanagement systems, laws and the legislation updates. In 2004 10,000 hours of training were given, with more than 2,000 participants, equal to54% of the total workforce.Training courses were also held for a variety of job positions in the company and, althoughthey cannot be classified as training activities devoted to safety and environmentalprotection, they provide employees with skills that are indispensable if they are to carry outtheir duties correctly and safely.


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18

HSE expenditure

Capital expenditures and operating expenses are analysed in order to select and classifyitems of expenditure incurred specifically and primarily for occupational health andsafety and the environment.In 2004, HSE expenditure amounted to approximately €77 million (comprising capitalexpenditures totalling more than €60 million and operating expenses totalling morethan €16 million).

The expenditure incurred in 2004 and in prior years has made it possible to maintainhigh environmental protection and safety standards when constructing and operatingplants, in accordance with the company’s policy and its objectives for continuousimprovement.

The item “landscape protection” comprises expenditure for restoration work after pipelaying and maintenance and expenditure for the landscaping and upkeep of green areasat facilities.The item “air/climate protection” mainly includes capital expenditures in connectionwith the conversion of several existing turbines to low-emission combustion systemsand other measures taken to limit and monitor atmospheric emissions.The main costs making up the item “other environmental protection activities ”comprise the costs incurred for environmental management, noise abatement, soilprotection, waste and waste water management and research and development.

Safety expenditure does not include capital expenditures relating to network and plantsafety and operating expenses for network and plant maintenance and control, unlessthey also have a substantial environmental content. For example, expenditures for safetyvalves, remote-controlled valves, increased pipe thickness, greater burial depth for pipeswith respect to current legislation, route changes, etc. are not included. These costs(which are considered an integral part of company activities) account for a highpercentage of the company’s total capital expenditures and operating expenses.

Occupational health and safety expenditure comprises the costs incurred for studies,research, risk assessments pursuant to Legislative Decree 626/94, preparation ofcontingency plans, plant and equipment (automatic safety and fire-extinguishingsystems, materials and warning signs), personal safety devices, accident insurance,medical equipment, analysis and control apparatus, work on plants, industrial hygieneinspections and monitoring and medical tests.

A detailed list of HSE expenditure can be found in the table “ Performance indicators “onpage 51.

2000 2001 2002 2003 2004

80

60

40

20

Capital expenditures Operating expenses Landscape protection 36% Air/climate protection 33%

Health and safety 18% Other environmental protectionactivities 13%

HSE expenditure (million €) Percentage breakdown of expenditure


2004 REPORT

ENVIRONMENTAL PROTECTION

19

Concern for the environment is shown in every stage of Snam Rete Gas’s activities.

The criteria and procedures used for the location, design, construction, managementand decommissioning of plants and for the conduct of activities comply with highenvironmental protection and safety standards.

The most significant environmental issues associated with Snam Rete Gas’s activitiesconcern the temporary disturbance of land when new transmission infrastructure isbeing constructed and the atmospheric emissions from the gas turbines used incompressor stations.

The transmission of natural gas provides a source of energy with a low environmentalimpact to millions of homes, as well as to industries and power plants, making itpossible to enhance energy efficiency, reduce atmospheric emissions and improve thequality of the environment.

Environmental data and indicators are summarised in the “Performance indicators” onpages 50-51.

environmental protection

Reduction of energy consumption

To curb energ y consumption, targeted energ y saving programmes have beenimplemented over the years, involving the use of the best available technology and theinstallation of turbines with a high level of efficiency (up to 37%).Natural gas consumption at compressor stations is controlled by the Dispatching Centrewith specific software programs. These programs make it possible to optimise thefunctional efficiency of each station and the operating conditions for the import lines.The energy saving achieved by applying these information systems is estimated to be inthe region of 4-6%.During the year, the ICT (Information Communication Technology) project for compressorstations was completed, with remote-monitoring and diagnostics programs installed onthree units at the Masera station and on three units at the Terranuova Bracciolini station.The remote-monitoring and diagnostics system reveals any abnormal situation and/ordeterioration of compressor unit efficiency, in real-time, thus making it possible tointervene in the most appropriate way in order to return to optimum operating conditions,with a consequent reduction in energy consumption and atmospheric emissions.

Energy consumption in 2004 totalled 10,335 TJ. Compared with 2003, this figure shows anincrease of approximately 17%, mainly due to the increase in the volume of gas sent into thenetwork (+ 5.3%) and to the higher volumes of gas that it was necessary to compress in thecompressor stations (+29%), where the gas turbines are installed. These turbines are fed bynatural gas and are used for the direct operation of centrifugal compressors which give thegas the energy required for it to be transmitted through the pipeline network.The operating conditions of the stations do not remain constant over time, but varyfrom year to year according to the quantities of gas transmitted and the transmissionconditions through the pipeline network required by the shippers.Energy consumption for transmission activities accounted for 84% of the total (8,768 TJ).

Most of the energy used was natural gas, which accounted for more than 93% of totalenergy requirements.

Gas transmission 84% General services 4%GNL Italia 12%

2000 2001 2002 2003

0.25

0.50

2004

Percentage breakdown of energy consumptionby activity

Energy consumption/energy transmitted (%)(Transmission activities)

2000 2001 2002 2003

0.2

0.4

0.6

0.8

2004

Energy consumption/energy transmitted* average distancetravelled (%/103 km) (Transmission activities)

2000 2001 2002 2003

5,000

10,000

15,000

2004

Natural gas Electricity Other energy

Energy consumption (TJ)


2004 REPORT


20


2004 REPORT


21

The energy consumption indicator relating to gas transmission activities increased from0.25 in 2003 to 0.31 in 2004.The measures adopted over the years towards reducing energy consumption have madeit possible to maintain the indicator below the 2000 level. The indicator which takes intoaccount not only the quantity of gas transmitted, but also the average distance that ittravels through the transmission network, has risen compared to 2003, while stillremaining below the values recorded during the period from 2000 to 2002.

Air protection

Atmospheric emissions of polluting substances derive primarily from combustionprocesses.The use of natural gas as a principal source of energy makes it possible to minimiseatmospheric emissions of sulphur oxides and particulate. Over the past few years, in order to reduce nitrogen oxide emissions caused by thecombustion of natural gas in the gas turbines used in compressor stations, some existingturbines have been retrofitted and new ones have been installed with low-emissionburner systems.During the year, in order to upgrade the compressor stations and with a view towardscontinuous improvement, programmes have been initiated which comprise theinstallation of 7 new low-emission compressor units by the end of 2006, the conversionof two low-emission compressor units by the end of 2005 and the application, by the endof 2007, of new combustion technologies on 7 existing low-emission compressor unitsso as to improve their reliability.The action taken in recent years to curb atmospheric emissions has made it possible to limitnitrogen oxide emissions, despite increased activity and higher energy consumption.

Total NOx emissions in 2004 amounted to approximately 1,245 tonnes, 1,160 tonnes ofwhich were due to gas transmission activities.

2000 2001 2002 2003 2004

500

1,000

1,500

2,000

Transmission LNG re-gasification General services

NOx emissions (t)

2000 2001 2002 2003

25

20

15

10

5

2004

NOx emissions/gas transmitted (kg/106 m3)(Transmission activities)

Greenhouse gas emissions deriving from Snam Rete Gas’s activities consist of carbondioxide and methane, which is the main component of natural gas.

Carbon dioxide is produced during combustion processes and is directly correlated tofuel consumption. In 2004, the increase in energy consumption also caused an increasein total CO2 emissions which rose from approximately 459,000 tonnes in 2003 toapproximately 543,000 tonnes in 2004.

Natural gas emissions originate partly from the normal operation of plants and partlyfrom discharges into the atmosphere during maintenance operations or as a result ofaccidents. They can be divided into four categories: vented emissions, fugitive emissions,emissions from pneumatic actuators powered by gas, and emissions of unburnt gas influe-gas from combustion plants.

There was an increase of natural gas emissions from 37.5 million cubic metres(corresponding to approximately 23,820 tonnes of methane) in 2003 to 48.9 millioncubic metres (corresponding to approximately 31,180 tonnes of methane) in 2004.This increase was due mainly to the work carried out on the large-diameter pipelines(DN 1200) for the insertion of the inter-connections on new sections of the import linesfrom Algeria and from Russia.In order to minimise discharges of natural gas during these works and during maintenance,Snam Rete Gas adopts specific operating procedures. Moreover, in 2004, natural gas re-compression activities were carried out in three sections of the pipelines, which made itpossible to avoid venting more than 1.5 million cubic metres of gas into the atmosphere.Again in order to reduce emissions of natural gas, programmes continued during theyear with the aim of: ■ installing safety valves complete with warning devices for the tele-signalization of any

discharges resulting from the partial and accidental opening of the valves themselves;■ replacing gas-activated starter turbines with electric or hydraulic starter systems for

the gas turbines.

The natural gas emissions indicator relating to transmission activities rose from 0.048%in 2003 to 0.058% in 2004.

Unburnt gas 0.3%

Vented 39%

Fugitive 22%

Pneumatic actuators 38.7%

Percentage breakdown of natural gas emissions

2000 2001 2002 2003 2004

20

40

60

Transmission LNG re-gasification

Natural gas emissions (106 m3)


2004 REPORT


22

2000 2001 2002 2003 2004

200,000

400,000

600,000

800,000

Transmission LNG re-gasification General services

CO2 emissions (t)

2000 2001 2002 2003

3,000

6,000

9,000

2004

CO2 emissions/gas transmitted (kg/106 m3)(Transmission activities)

On 13 October 2003, theEuropean Parliament and theCouncil of the European Unionapproved Directive 2003/87/ECwhich establishes a system bywhich allowances of greenhousegas emissions can be tradedwithin the European Union.The Directive provides that, asfrom 1 January 2005, noinstallation that falls under thejurisdiction of this Directive mayemit greenhouse gas, i.e. maycontinue to operate, unlessspecifically authorised to do so.The Directive also establishesthat by 28 February 2005, for allinstallations that fall under thejurisdiction of the Directive, beallocated allowances of CO2

emissions so that they may takepart to the emission trading.

In order to apply the Directivein Italy, on 12 November 2004Decree 273/2004 was issued(converted into law no. 316 on

30/12/2004), with the aims ofactivating the proceduresnecessary for authorisinginstallations to emitgreenhouse gas and ofcollecting the informationrequired in order to issue theemission allowances.The law establishes theobligation of operatorsmanaging installations that fallunder the jurisdiction of theDirective to:■ file their request for

authorisation to emitgreenhouse gas by 5December 2004;

■ provide the necessaryinformation to proceed withthe assignment of the CO2

emission allowances by 30December 2004.

The Snam Rete Gas installationsthat fall under the jurisdiction ofthe Emission Trading Directiveare the 11 compressor stations

(Enna, Gallese, Istrana,Malborghetto, Masera,Melizzano, Messina, Montesano,Rimini, Tarsia and TerranuovaBracciolini), the entry pointterminal in Mazara del Vallo andthe liquefied natural gas re-gasification plant in Panigaglia.For these installations,applications for authorisation toemit greenhouse gas wereforwarded to the Ministry of theEnvironment and LandscapeProtection, together with therequired information for theassignment of the respectiveemission allowances.

On 28 December 2004, theMinistry of the Environmentand Landscape Protection,acting in concert with theMinistry of ProductionActivities, granted the SnamRete Gas installationsauthorisation to emitgreenhouse gas.

SNAM RETE GAS AND EMISSION TRADING

CO2 emissions from the Snam Rete Gas installations under the jurisdictionof the “Emission Trading” Directive (t/year)

2000 2001 2002 2003 2004Gas compressor stations 484,180 350,659 353,013 322,785 435,023

Entry point terminal in Mazara del Vallo 2,082 1,499 1,860 2,017 950

LNG re-gasification plant 97,533 95,039 92,441 92,642 54,106


2004 REPORT


23

The operating conditions ofSnam Rete Gas‘s plants are notconstant over time, but vary

from year to year depending onthe volumes of gas transmittedand the transmission

conditions through thepipeline network required bythe shippers.


2004 REPORT


24

2000 2001 2002 2003

0.02

0.04

0.06

2004

Pressure reduction andregulating plants 47%

LNG terminal 4%

Transmission network 31%

Compressorstations 18%

Natural gas emissions/gas transmitted (%)(Transmission activities)

Percentage breakdown of natural gas emissionsby type of installation

Total emissions of greenhouse gas increased of 25% compared to 2003, due to theincrease in energy consumption and to the increase of natural gas emissions, whereasthe indicator for greenhouse gas emissions relating to transmission activities rose by23%.

Figures for atmospheric emissions have been determined on the basis of directmeasurements or, in the absence thereof, by using emission factors recommended by theUS Environmental Protection Agency (US-EPA) or by the CORINAIR (CooRdinationINformation AIR) project. In particular, natural gas emissions have been estimated usinga method developed by the Gas Research Institute (GRI), in conjunction with US-EPA,and adapted to Snam Rete Gas’s plant configuration with an ad hoc research project andmeasurement campaigns in the field.Figures for CO2 equivalent emissions have been calculated on the basis of the globalwarming potential of the carbon dioxide and methane emissions as indicated by theIntergovernmental Panel on Climate Change (IPCC).

Substitution of ozone-depleting substances

In 2004, with the replacement of the last two fire-extinguishing systems using NAF-S-IIIin the Gallese station, the programme for eliminating ozone-depleting substances(HCFC) used in fire-extinguishing systems at compressor units was completed.The programme, which was begun in 1999, comprised the installation of 25 new fire-extinguishing systems that use fine water spray systems. This technology combines ahigh level of efficiency with operational safety and total environmental compatibility.

2000 2001 2002 2003

5

10

15

2004

Greenhouse gas emissions/gas transmitted(t CO2 eq./106 m3)(Transmission activities)


2004 REPORT


25

Waste management

The quantities of waste produced by Snam Rete Gas’s activities are very limited andoriginate mainly from the maintenance and operation of the plants and pipelines, andmay vary considerably from year to year. Scrap iron, which is entirely recovered,constitutes the largest portion of waste resulting from maintenance activities.Used oil and spent batteries containing lead are consigned direct to the consortiaresponsible for their recovery, while other types of waste are treated and disposed of byauthorised service companies.To improve waste management, ecological waste areas have been created at all the gascompressor stations and areas dedicated specifically to the temporary storage of wastewill be created at the stations in Enna, Messina and Malborghetto by the end of 2005.

The total production of special waste in 2004 amounted to approximately 1,750 tonnes,approximately 1,570 tonnes of which belonged to the non-hazardous category (89% ofthe total). Approximately 79% of total waste production was recovered.

Waste production resulting from transmission activities increased from approximately720 tonnes in 2003 to approximately 1,650 tonnes in 2004, due to an increase in thequantities of scrap iron that were disposed of.

Selective waste collection continued at head office and this made it possible to recoverand recycle approximately 28 tonnes of paper and cardboard.

Water consumption and waste water management

Water consumption and waste water in gas transmission and liquefied natural gas re-gasification activities have little significance from the environmental point of view, dueto the limited quantities involved and the type of waste water discharged.In 2004, water off-take consisted of approximately 4 million cubic metres of sea-waterand 0.33 million cubic metres of fresh water.The sea-water is used to cool the auxiliary power plants at the liquefied natural gas re-gasification terminal and the fresh water is used mainly for office activities, fire-extinguishing systems and irrigating green areas.

Of the total quantity of fresh water used, 66% was drawn from wells and the balancecame from water-mains.

500

1,000

1,500

2,000

2000 2001 2002 2003 2004


Waste production (t)

In order to improve waste water management, GNL Italia’s terminal has started a programmeto connect the office sewage system to the main drainage system, by the end of 2005.

The data regarding the water consumption and waste water during the period 2000 –2003 have been updated to take into account a different classification criteria forconsumption of sea-water at the liquefied natural gas re-gasification plant.

Noise reduction

The main sources of noise in the gas transmission system are the compressor stations,which are usually in rural areas along the pipeline network, and the pressure reductionplants, which link pipelines operating at different pressures.To minimise noise from its facilities, Snam Rete Gas’s underlying policy is one ofprevention. This involves the correct dimensioning of plants in the project preparationstage, accompanied by an acoustic impact forecast.The measures taken involve installing insulated cabins, sound-absorbing hoods, low-noise valves and silencers on vents and burying pipes.A program was started at the end of 2003, with a view towards the continuousimprovement of the environmental management system at the compressor stations,which provides for the replacement of the sound-proofing insulation on the flue-gasstacks of 13 compressor units, by the end of 2007. To verify sound levels, specific noise assessments to measure emissions are planned annually.

Landscape protection

A gas pipeline route is chosen from a number of alternatives in the light of environmentalimpact, transmission safety and technical-economic feasibility. Specifically, the aim is toavoid or disturb as little as possible areas of special natural or cultural interest,archaeological areas, geologically unstable areas and inhabited areas, or those where newhousing is planned. In the construction phase, trenches are excavated for the pipe-layingoperations using technologies that interfere as little as possible with the surroundings.Once the pipes have been laid, the land is restored very carefully so that it is returned to itsoriginal condition.

The following are the main environmental restoration activities performed during the year:

Malborghetto-Bordano pipeline (in Friuli Venetia Julia)Works began in the Upper Gleris Valley for the environmental restoration of an area usedfor storing debris from the excavation of tunnels (Deponia Chiavals, which underwentsevere erosion during the floods in 2003), using soil bioengineering techniques of seedsowing and planting with the help of plant micro-organisms (mychorrhiza), organismsthat live in nature in symbiosis with the root systems of plants and that increase theirwater-absorption capabilities.


2004 REPORT


26

2000 2001 2002 2003 2004


3,000

2,000

4,000

1,000

5,000

Water consumption (103 m3)

Offices 69% Irrigation 24%

Fire-extinguishing systems and other uses 7%

Percentage breakdown of fresh water consumptionby use


2004 REPORT


27

The portals of the tunnels will also be integrated into the environment, by coveringthem with natural stone and planting mature plants and indigenous forest trees grownespecially for the purpose until they reached suitable dimensions.

Bordano-Flaibano pipeline (in Friuli Venetia Julia)The morphologic reinstatement of the right-of-way of the pipeline was completed,including the replacement of the turf and topsoil that had previously been stripped.The banks of a number of small streams were restored, following soil bioengineeringtechniques which include the use of wild plants grown from cuttings.The wooded areas will be restored during 2005 by planting indigenous shrubs and plants.

Campochiaro – Sulmona pipeline (in Abruzzo)Botanical, pedological and zoogeographical studies were completed as part of acomprehensive environmental monitoring project aimed at verifying the effectivenessof the restoration works after the first five years from the construction of the pipeline.Environmental restoration activities will begin in 2005 by re-delineating the sections and bysowing seeds of grass species which, thanks to the behaviour of their root systems, willbegin the process of stabilising the surface of the land disturbed by the works.Works aimed at stabilising the slopes will be carried out by applying soil bioengineeringtechniques, with the use of timber, willow cuttings and natural stone.

Enna – Bronte pipeline (in Sicily)Botanical, pedological and zoogeographical studies were begun as part of acomprehensive environmental monitoring project aimed at verifying the effectivenessof the restoration works after the first five years from the construction of the pipeline.Particular attention was paid to protected areas on Sites of Community Importance(such as the Pozzillo Lake), in which stations were created for surveying and monitoringthe local birdlife.

Pipeline monitoring

When plants and pipelines are in operation, they are subjected to regular checks andmaintenance to ensure high safety standards. The integrity of pipelines is also checkedby running devices known as “intelligent pigs” through them, enabling possible faults tobe detected. Special attention is paid to the transmission route which is inspectedregularly with motor vehicles, helicopters and on foot, so as to detect potentiallydangerous situations caused, for example, by work being carried out by third parties inthe vicinity of the pipeline. Similarly, any movements that could cause landslides atspecific points of the route are kept under control.

In 2004, approximately 1,650 kilometres of network were inspected with intelligent pigsand some 11,800 kilometres were monitored by helicopter.

Pipelines laid in areas subjected to geological monitoring continued to be monitoredwith strain gauges. In addition, 13 new strain gauges were installed and 160 existinggauges were repaired.

During the year, geological surveys were carried out on 1,650 kilometres of network,including 500 kilometres of pipeline involved in this type of survey for the first time. Afurther 150 surveys were carried out at sites subject to geological monitoring.

A campaign took place during the month of March involving the visual/instrumentalinspection of the pipelines that cross the Strait of Messina. The purpose of thismonitoring was to check both the state of the pipelines and that of the surroundingenvironment in order to prevent any interference and/or damage from occurring. Inaddition, a monitoring campaign took place in September, at the Mortelle (ME),Favazzina and Palmi (RC) arrival points, by means of aero-photogrammetric surveying.Data, of a strictly environmental nature collected from these inspections, is madeavailable upon request to institutions in charge of environmental control.

Upgrading the importpipelines from RussiaThe start-up of the Bordano-Flaibano ND 1200 gas pipeline(approximately 32 km length)is one of the last links in theexpansion of the gas pipelinenetwork which imports gasfrom Russia. The pipeline islocated in the district of Udineand crosses the territory of tenmunicipalities.Morphologically andenvironmentally speaking theroute can be divided into threedistinct sections. The firstsection runs adjacent to the

bed of the Tagliamento riverand crosses a Site of EuropeanImportance (SIC), the secondclimbs over the San Danielehills with permanent meadowsand woods while the thirdcrosses a plain characterised bycrop rotation.The gas pipeline runs parallel tothe existing lines andconstruction activities wereoptimised to limit the impact onthe territory. In particular, in thefirst section great care was takenwhen crossing the “Risorgive diBars” (Bars GroundwaterDischarges - SIC area), studying

and monitoring the aquifer,sowing wild seeds and working inperiods when weather conditionshad least impact. In the secondsection special attention was paidto landscaping works. In the thirdand final section, the mostimportant criteria was to workrapidly so as to limit prolongedinterruption of agriculturalactivities.Works were completed in thetimes scheduled and theconstructive contacts with localauthorities were confirmed alsoby the excellent feedback fromcontrol authorities.

Crossing the Brenta RiverThe crossing of the Brenta river,which was realized by means ofthe Horizontal DirectionalDrilling technology for thenatural gas importation fromRussia of the Sergnano- TarvisioND 900 pipeline, has beensuccessfully concluded. Thenew crossing, that replaces thepier-supported aerial existingone, carried out at thebeginning of the 70’s, isconstituted by a pipe of 900mm of diameter and 600 m of

length.The crossing consists of aboring under the river bed,starts from the left bank(Comune di San Giorgio inBosco) to the opposite one(Comune di Piazzola sulBrenta). After realizing a pilothole with a drill bit of about300 mm, the hole has beenwidened with subsequentreaming to 1200 mm: the"pulling-back" of the piping inthe hole, which was kept instable conditions withbentonite-mud, was carried out

in one only working day.The use of this "trenchless"technology has allowed to laythe pipeline without anyinterference with the banks atthe bed of the Brenta riverreducing, at the same time, asmuch as possible openexcavations.Works ended with theconnection with the existingpipeline, the subsequentremoval of the aerial crossingand the re-naturalization of thebanks of the river.


2004 REPORT


28

Crossing the Maiella NationalParkFor a few kilometres, theCampochiaro – Sulmonapipeline runs through naturalareas in the Maiella Park,through plateaux and beechwoods in particular. In themeadows and especially in thehigh-altitude glades, the turfand topsoil has been strippedand put to one side. The beachwoods and all wooded areaswill be reforested, in agreementwith the regional forest corpsand in accordance with theindications contained in thepreliminary botanical studies,making use only of indigenouswoodland species.For the Campochiaro – Sulmonapipeline, a project formonitoring the effectiveness ofthe restoration works isunderway, which is based on an“ante operam” phase, i.e.performed before works are

started, for defining thecharacteristics of the naturalhabitats through which theroute of the pipeline passes.“Sample” areas have beenidentified for the purpose,selected by degree ofrepresentativeness, in whichbotanical studies have beencarried out (according tomodern phyto-sociologycriteria), as have botanical,pedological (soil) andzoogeographical studies. The principal indications forplanning the re-vegetationwork along the route of thepipeline arose from thesestudies, directing the choicesmade towards the totalreconstruction of the habitats. The “post operam” phase of thefive-year program for monitoringthe dynamics of evolution of the“re-constructed” ecosystems willbegin on completion of thepipeline construction works: the

scientific parameters that canobjectively be verified andmonitored as they evolveinclude the chemical andphysical conditions of theground, the degree ofdevelopment and associationof the plant species(phytocoenosis), and thepresence of animal species,particularly wildlife and aboveall birdlife.Some of the survey stations(sample areas) themselves arelocated within the MaiellaNational Park, specificallybecause of the particularattention paid to these naturalenvironments: a number of Sitesof Community Importance(which protect habitats all overEurope considered to be priorityareas), as well as SpecialProtection Zones (establishedfor safeguarding birdlife) are, infact, situated within theperimeter of the Park.

CARE FOR THE ENVIRONMENT DURING THE CONSTRUCTION OF GAS PIPELINES


2004 REPORT

OCCUPATIONAL HEALTH AND SAFETY

29

Snam Rete Gas is pursuing an active policy of prevention and, with a view to continuousimprovement in terms of occupational health and safety, is engaged in numerousongoing activities and initiatives.

Results are assessed and programmes and objectives are defined and analysed regularlyby the HSE Committee, operating units being kept duly informed at meetings.

Activities and initiatives

The Occupational Health and Safety Management SystemIssues regarding health and safety are governed by an Occupational Health and SafetyManagement System, drawn up on national and international guidelines. This management system is continuously implemented; in particular, during the year,new documents were issued and/or updated, also on the basis of new legislativeobligations, which concern: measures of prevention and protection while performinginternal inspections of the pipelines; activities involving risk of exposure to ionisingradiation; managing the chemical agents in use and organising first-aid in work places.Audits are performed periodically to verify application of the management system.

Documents for the assessment of occupational hazardsIn accordance with current legislation concerning occupational health and safety, 14documents are in use for assessing occupational hazards, divided according to thevarious company production units. The 8 Health and Safety Documents of the SRGRegional Centres were updated during 2004.To fulfil the obligations established by Legislative Decree 233/03 in relation to health andsafety requirements for workers exposed to the risk of an explosive atmosphere, all the

occupational health and safety


2004 REPORT


30

dangerous areas of the pipeline and of the compressor stations have been identified andclassified.Meetings concerning the management of Health and Safety Documents are held on aregular basis, as required by the law (Art. 11 of the Legislative Decree 626/94), attendedby members of staff designated as “assignors of work” (or their representatives), themanager of the corporate prevention and protection service, occupational physiciansand workers’ safety and environment representatives. A total of 14 risk prevention andprotection meetings were held.

Information, briefing and trainingSafety meetings were organised by unit managers and training activities includedcourses on fire prevention and fire fighting, safety courses for recruits and employees inthe process of changing jobs and courses on the safety aspects of contract workperformed by third parties. To inform and to raise internal awareness, the company’sprevention and protection service organises meetings on specific topics (e.g. ionisingradiation, occupational hazards associated with specific jobs, use of specific machinery)and prepares the necessary teaching aids. Dedicated safety handbooks are available onthe company’s intranet site.

Company intranet siteTo improve internal communications, a “Health and Safety” site on the in-house ITnetwork can be accessed by all employees. This site contains files on the main health andsafety laws, the company’s prevention and protection structure, the management andoperating procedures included in the occupational health and safety managementsystem and documents with general information, as well as safety data sheets regardingchemical agents.

Personal Safety Devices (PSD)To fulfil the obligations established by Legislative Decree 233/03 regarding explosiveatmospheres, the company standard on PSD and on work clothing was re-defined duringthe year, introducing new anti-static fabrics with good resistance to fire.In conjunction with the related units, work clothing was made with new styling and withthe new “corporate colours”, and was made available to employees as from January 2005.

Training and briefingemployees on issuesconcerning occupationalhealth and safety is offundamental importance in thedevelopment and upkeep of aculture of prevention, which isindispensable for the correctperformance of workingactivities. Special attention must bepaid, therefore, whiledefining training programmesfor each employee andin preparing teaching aidsthat allow for effectivecommunication.

For this reason, the company’sprevention and protectionservice has progressivelyimplemented a collection ofteaching-information aids

called “Safety Handbooks”,which are distributed to theparticipants of training coursesand which are, in any case,always available to employeesby accessing the “Health andSafety” intranet site.The Safety Handbookscurrently available refer to:■ driving vehicles;■ noise;■ warning signs and notices ; ■ chemical hazards;■ videoterminal units;■ personal safety devices;■ emergency response in

workplaces.

Specific topics related to thecompany’s principal workingactivities are discussed in thesafety handbooks, withparticular attention toanalysing the associatedoccupational hazards, theprevention and protectionmeasures adopted, codes ofpractice, operating proceduresand respective legislation.

The prevention and protectionservice, in conjunction with thetechnical units involved, isresponsible for updating thesafety handbooks and forissuing new ones againstrequests from operating units,or in order to fulfil specifictraining requirements.

SAFETY HANDBOOKS

Fire prevention and emergency responsesActivities continued for updating and managing contingency plans, particularly thosefor appointing co-ordinators, deputies and employees in charge for emergency, as well asfor organising the annual building evacuation drills.91 contingency plans (CP) are currently in place, with a prevention structure of 389employees who have been suitably trained.The characteristics and contents of the fire-extinguishing cabinets, to be positioned inthe buildings, have been defined and the respective technical data sheets drawn up fortheir procurement.Control, inspection and maintenance activities on the detection devices, alarms and fire-extinguishing equipment are duly recorded in the registers dedicated to the purpose.

Corporate first-aidIn observance of the provisions established by Ministerial Decree 388/03 regardingcorporate first aid, a set of operating instructions have been drawn up. Measures havealso been taken to identify the obligations established by the Decree based on the natureof activities carried out, the number of employees and the hazard factors involved.The contents of the first-aid kits were defined in conjunction with occupationalphysicians, as were the contents of the medication packets, the PSD for employeestrained to provide first-aid and the respective technical data sheets drawn up forprocurement of the material.The new first-aid courses established by the current legislation will be started during theyear 2005.

“No smoking” regulations in the work placeSnam Rete Gas has been implementing Eni‘s “no-smoking” policy to prevent risksconnected with passive smoking since 2001, two years before Law no. 3 of 16 January2003 was passed, which bans smoking in public concerns and work environments.Smoking areas have been created in the corporate headquarters at San Donato Milanese.

The processes in whichoccupational hazards areidentified and assessed are ofthe utmost importance insafeguarding the health andsafety of employees. Followingthe risk analysis, the preventionand protection measures aredefined, with particularconcern to Personal SafetyDevices (PSD).In selecting the PSD, theirtechnical characteristics andcomfort must be adequatelyassessed, to ensure that theemployee is provided withefficient and comfortablearticles.With the issuing of LegislativeDecree 233/03, which definesthe minimum requirements forimproving the protection of thehealth and safety of workersexposed to the risk of explosiveatmospheres, it becamenecessary to adapt the standard

regarding Personal SafetyDevices (PSD) by introducingnew work clothing, made fromanti-static materials.For this purpose, the companydeemed that a radicalrenovation of the currentstandard was called for, withthe aim not only of fulfillinglegislative obligations, but alsoof providing employees with anew line of highlytechnologically clothing,complete with accessories andwith new “corporate colours”.The choice of material fell on afabric which is made primarilyof fibre in Nomex and inpolyester, which is highlyresistant to heat and to fire andwhich has excellent electricalinsulating characteristics.The chosen fabric ensures anti-static characteristics (UNI EN1149), good resistance to fire(UNI EN 531) and is highly visible

(UNI EN 471), maintaining goodcharacteristics of transpirationand water-proofing whenrequired.In order to draw commentsand suggestions from theworkers involved, overallsmade from the new materialswere tested “in the field”, thusallowing the workers toexpress themselves inconnection with the choicesmade through theirrepresentatives for safety andthe environment (RSE).Particular attention was paid tooperating staff, procuring asingle-shoulder rucksack (tofacilitate carrying companymobile phones, workinstruments, etc.), and aspacious bag for carrying PSD(boots, safety shoes, hard-hat,earmuff, work clothes, etc.),used in performing their dailyworking activities.

ANTI-STATIC CLOTHING


2004 REPORT


31


2004 REPORT


32

Accident prevention

To ensure the safety of employees, occupational hazards are assessed, prevention andprotection measures are identified and improvement programmes are drawn up incollaboration with members of staff designated as “assignors of work”, the corporateprevention and protection service, occupational physicians and workers’ safety andenvironment representatives.

The analysis of injury statistics is of fundamental importance in determining the causes ofaccidents and is an effective tool for identifying the measures that need to be taken in termsof prevention and protection so that occupational hazards can be eliminated or reduced. For this purpose and to enable a comprehensive assessment to be made, analysis involves allreported accidents with injuries attributable to occupational/general hazards, roadaccidents and commuting accidents.

To optimise data management, the company has an IT system that informs all interestedparties immediately about the accident and records the causes and prevention measuresin place, together with any other information necessary to analyse the incident. The system also provides data concerning accidents in the prior years, with respectivestatistics.

Compared to 2003, the 2004 injury indicators show an increase of 14% in the frequencyrate (from 14.3 to 16.3) and of 33% in the severity rate (from 0.36 to 0.48).The increase of the above-mentioned statistics is due to the substantial increase incommuting accidents, i.e. accidents that occurred while travelling from home to workand vice-versa, (a figure that rose from 11 during the previous year to 21 in 2004), which,sadly, include the death of two workers in road accidents.Without including commuting accidents, the frequency rate fell progressively from 13.4to 10.7 from 2001 to 2004.

Analyses of injury statistics are discussed in detail during periodic safety meetings heldat operating units in order to make employees aware of the causes of the accidents andthe prevention and protection measures that need to be taken.

5

10

15

20

2001 2002 20042003

0.2

0.4

0.6

2001 2002 20042003

Injuries at workFrequency rate*

Injuries at workSeverity rate**

*number of injuries, resulting in inability to work for at least one day, for every million hours worked**number of working days lost, relative to injuries resulting in inability to work for at least one day, for every thousand hours worked.

Professional risk 42%

General risks 8%

Commuting accidents 32%

Road accidents 18%

Percentage breakdown by type of injury


2004 REPORT


33

Safeguarding health

To safeguard the health of its employees, Snam Rete Gas has introduced measures toprevent work-related ill health and has created work environments to suit individualneeds.

Dedicated mandatory health surveillance is organised in relation to activities regardingthe use of VDU’s, night work, use of chemical agents and manual handling of loads. Bythe end of 2004, these activities involved 1,166 employees.Health surveillance activities are managed with the aid of a computerised program,which makes it possible to consult the recordings of the medical examinations carriedout and which allows for future programming.

Health protection measures for the staff were carried out by occupational physiciansaccording to specific protocols that establish which assessments are to be made,depending on the kind of risk involved.In 2004, health surveillance activities included 571 medical examinations, along with1,888 tests comprising 1,121 laboratory analyses and 767 scans.

2001 2002 2003 2004Medical examinations 381 743 480 571

Laboratory analyses 951 1,897 914 1,121

Tests Scans 472 993 663 767

Total tests 1,423 2,890 1,547 1,888

In order to monitor work environments, periodic surveys of the noise levels in the plantswere carried out, with the aim of assessing the degree of personal exposure of theemployees involved. In collaboration with the prevention and protection service, anoccupational physician carried out inspections of work environments in order to verifyoperating procedures and ergonomics at workstations and to identify any need forimprovement (furnishings, lighting, warning signs and notices, etc.).

Objectives and targets of the 2005 health and safety programme

Objectives Targets

- New emergency and first-aid fittings Procurement and installation in the buildingsin the buildings of cabinets containing emergency equipment

and of first-aid kits

- Updating the contingency plan of the main Preparation of a unified contingency plan foroffice buildings the main office buildings and drawing up

of new emergency floor plans

- New training course for “Superintendent of Preparation of teaching aids in conjunctionWorks” regarding safety during contract work with the units involved

- Training workers on the new anti-static Preparation of teaching aids and definitionPersonal Safety Devices of training activities, in conjunction with

the units involved


2004 REPORT

COMMITMENT TO SUSTAINABLE DEVELOPMENT

34

A commitment to sustainable development characterises Snam Rete Gas’s HSE policyand is an important growth factor for its natural gas transmission and LNG re-gasification activities. These activities provide a source of energy which has a lowenvironmental impact and which, in 2004, satisfied approximately 34% of Italy’s energyrequirements.

commitment to sustainable development

Shareholders Employees

Italian Electricityand Gas Authority

Shippers

Organisations andAssociations

Lenders

Localcommunities

Institutions(National and local)

Suppliers

Snam Rete Gas


2004 REPORT


35

Snam Rete Gas recognises that the success of a company is gauged on the basis of acombination of economic, environmental and social factors that take into account theneeds of the general public and investors. Accordingly, the company is committed tocreating value for its shareholders and the community, with proper regard for thenatural and social environments in which it works.

Snam Rete Gas is engaged in building solid and constructive relationships with all itsstakeholders and intends to strengthen these in order to pursue mutual objectives.

Snam Rete Gas’s commitment has been acknowledged by Avanzi SRI Research, theagency for environmental and social rating, which has expressed its positive evaluationof the organisational management and of the company’s attention to safety andenvironment protection.

Our objectives

In its activities, and with the objective of continuously improving its commitment tosustainable development, Snam Rete Gas is operating in order to:■ reduce atmospheric emissions by using new technologies and low-emission devices,

where technically and economically feasible;■ limit disturbance to the land when laying pipelines and, once these have been laid,

return it to its original condition with careful restoration operations;■ reduce energy consumption by installing high-efficiency gas turbines and using

advanced software systems to optimise gas transmission programmes in terms ofoperating and energy efficiency;

■ monitor the structural integrity of pipelines with diverse systems to ensure highsafety standards;

■ replace the ozone-depleting substances used in fire-extinguishing systems;■ promote research and development activities aimed at reducing environmental

impact and improving safety conditions;■ guarantee the safety of employees by carefully assessing occupational hazards,

introducing improvements and implementing management and operatingprocedures, as well as safety plans;

■ safeguard the health of employees by means of specific health surveillanceprogrammes;

■ create a positive work environment for human resources, the premise being that theyare key corporate assets;

■ provide suitable professional training for employees to ensure a high level ofknowledge, skills and experience;

■ create value for shareholders and the community;■ guarantee a continuous, reliable and safe gas transmission service for customers;■ build constructive relationships with the Italian Electricity and Gas Authority, with shippers

and with all other parties who are directly or indirectly involved in the company’s activities.

Ethics and human rights

Snam Rete Gas founds the daily practice of its activities on principles established byinternational institutions and conventions concerning the protection of human andlabour rights, trade-union freedom of association, health and environmental rights, therepudiation of forced labour, child labour and any form of discrimination, as well as therespect for values and principles regarding right conduct, transparency, energyefficiency and sustainable development.Corporate social responsibility has always characterised Snam Rete Gas’s conductthroughout its activities and its relations with the parties involved.It is on this basis that Snam Rete Gas is committed to the complete application of thepolicies and codes of practice defined by the Eni Group regarding social conduct andbehaviour in business dealings, be they inside or outside the company.


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Code of PracticeSnam Rete Gas has adopted and circulated the Eni Group Code of Practice which sets outclearly the values that the company recognises, accepts and shares, as well as theresponsibilities it undertakes in its relations both inside and outside the company. Thepurpose of the Code is to ensure that all activities are performed in compliance with the law,in a climate of fair competition, with honesty, integrity, correctness and in good faith andwith due regard for the legitimate interests of customers, colleagues, shareholders,commercial and financial partners and the communities in which the company operates.All Snam Rete Gas employees, without any distinction or exception, are committed tocomplying and ensuring compliance with these principles in the fulfilment of their dutiesand responsibilities. Under no circumstances can the conviction of acting for the benefit ofthe company justify any form of behaviour in contrast with these principles.Subsequent to the recommendations formulated by international institutions regardingcorporate social responsibility, on 31 July 2003 Eni re-confirmed the principles underlyingthe performance of its activities, by means of an addendum to the Code of Practice. Thisaddendum reaffirms the principles of business ethics and responsibility which areaccepted and shared by the Group and which refer to the system of values sanctioned bythe Universal Declaration of Human Rights of the United Nations, by the FundamentalConventions of the International Labour Organization and by the OCSE guidelines.

The Code of Practice has been delivered to all employees and is accessible to all on thesite www.snamretegas.it, where it is published both in Italian and in English.The Company has created a Committee and a Guarantor for the Code of Practice. TheCode of Practice Guarantor will examine:■ requests for clarifications and interpretations on the contents of the Code;■ suggestions regarding the text and application of the Code;■ information about violations of the Code, be they direct or indirect actions.The Company has distributed to it’s staff all information to contact the Code of PracticeGuarantor.

Human Resources

Determination in encouraging the development and professional enhancement of ouremployees, the premise being that they are key factors in the evolution and development ofour business, is an integral part of the cultural heritage and value system of Snam Rete Gas.The company dedicates great care to creating a working environment characterised bymutual respect and trust between employees and between employees and the company.The management and development of our employees are based on the accuratedefinition of roles and responsibilities, as well as the providing of training as a tool forincreasing knowledge and skills, communicating company policies and strategies,maintaining an open and constructive dialogue with employees’ representatives, and indirecting a performance evaluation system in which an individual’s contribution to theachievement of company objectives can be awarded.

EmploymentAt 31 December 2004, Snam Rete Gas employees numbered 2,473 (including 88 workingfor GNL Italia).

EMPLOYEES IN SERVICE

at 31.12.2001 at 31.12.2002 at 31.12.2003 at 31.12.2004Snam GNL Snam GNL Snam GNL Snam GNL

Rete Gas Italia Total Rete Gas Italia Total Rete Gas Italia Total Rete Gas Italia TotalExecutives 58 1 59 60 1 61 68 1 69 70 1 71

Senior staff 281 13 294 258 8 266 246 7 253 242 7 249

Office workers 1,526 39 1,565 1,372 32 1,404 1,295 29 1,324 1,283 31 1,314

Manual workers 989 66 1,055 863 52 915 791 47 838 790 49 839

2,854 119 2,973 2,553 93 2,646 2,400 84 2,484 2,385 88 2,473


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During the year, the reduction of staff by only 11 people was the result of 105terminations and 94 recruitments, 25 of which were from companies in the Eni group.Recruitments on the open market, totalling 69, mainly involved people with universitydegrees (33%) and high school/training college diplomas (61%).

10.8% of employed staff possess university degrees (10% in 2003), while 54.6% have highschool/training college diplomas.The average age has moved from 43.1 in 2003 to 43.3 years in 2004, and the averagelength of service from 18.2 to 18.5 years.

During the 4-year period being assessed, the number of female staff remained atapproximately 9% of all staff. The women are primarily employed in the headquarters inS. Donato Milanese, where they accounted for approximately 25% of the office workers,12% of the senior staff and 9% of the executives.

Training and professional developmentSnam Rete Gas ensures proper and continuous training for its employees, theorganisation of which is entrusted to dedicated structures in the company and in the EniGroup, as well as to qualified external training institutions.

In 2004, personnel training activities were aimed at reinforcing and disseminating SnamRete Gas’s business know-how and developing the expertise and attitudes thatemployees need in order to perform their roles in the company.

Activities continued for consolidating and updating technical and professional skillsand the use of new Information Technology systems which support operating activities.In particular, an on-line training project (e-learning) was developed, which involved allthe technical staff with an operating function and that centred on safety proceduresused in emergency situations. This project stood out for the innovative way in which thetraining contents were disseminated and for the effectiveness of the results achieved.Information/training programmes regarding safety, health and the environment wereorganised.Ad hoc training has been organised for new employees, for university graduates and forthe managerial staff (senior staff and executives), with particular attention toprofessional families affected by projects of organisation change to operating andmanagerial processes.

Courses organised for company employees in 2004 involved a total of more than 60,000hours of training, with an overall attendance figure of more than 4,000, involving 67% ofthe company’s employees.

40

20

60

80

100

Officeworkers

Manualworkers

Seniorstaff

Executives

Hours of Training Number of participants

Breakdown of training activities by qualification (%)

40

20

60

80

100

Officeworkers

Manualworkers

Seniorstaff

Executives

2001 2002 2003 2004

Breakdown of employees by qualification (%)


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Union rightsIn accordance with Worker’s Statute, Snam Rete Gas guarantees the right to all of it’semployees to freely express their own opinions and form union organisations, to jointhem and to carry out union activity. Specific areas have been set aside for union activityand permits are granted in accordance with the rules established by the Worker’s Statuteand specific worker’s contracts.

Initiatives for employeesSnam Rete Gas promotes social initiatives for its employees and their families, backingthese up with financial resources and dedicated company facilities. The Snam Rete Gas employment contract provides maternity benefits which allowemployees to continue to receive their entire salaries during the period of mandatorymaternity leave, instead of 80% as required by the law, thanks to an integration paid-inentirely by the company. Snam Rete Gas‘s employment contracts also guarantee workingstudents the right to their studies, by allowing for paid leave.

In 2004, the following initiatives were organised:■ a programmed prevention campaign for employees, known as the “Early Diagnosis

Plan”, in collaboration with Lega Italiana per la Lotta contro i Tumori (an Italian associationfor the fight against tumours), with screening tests in specialised medical centres. Thecampaign started in October 2002 and will be nationwide; at the present time, it is goingahead in the regions of Lombardy, Latium, Piedmont, Liguria, Emilia Romagna, Apuliaand Calabria;

■ a prevention campaign for employees working in the Region of Sicily, known as the“Sicily Health Project”, which provides for screening tests and medical preventionmeasures carried out at the Syndial plant in Priolo;

■ an influenza vaccination campaign for employees working in San Donato Milaneseand Rome;

■ healthcare for employees and their families■ acts of solidarity in favour of families of deceased employees,■ supplementary insurance for employees to cover accidents outside working hours;■ long-service awards for employees who have worked for Eni Group companies for a

continuous period of 25 years;■ a sports event - Trofeo della Neve (Snow Trophy) - with a weekly programme of skiing

competitions between Eni Group companies;■ foreign language study-holidays for employee’s children■ 15-day summer holidays for employees ’children aged between 6 and 14 at seaside and

mountain centres.■ public transportation passes at special prices for employees, in collaboration with

ATM (the public transportation company of Milan) and the Lombardy region.

Relations with the stakeholders

Shippers and the Italian Electricity and Gas AuthorityIn 2004, 38 shippers used the transmission service provided by Snam Rete Gas on itspipeline network. Relations with shippers led to very satisfactory results thathighlighted the role played by Snam Rete Gas in facilitating access to the system.

Snam Rete Gas has established an extremely constructive relationship with the Italianregulatory authority, the Electricity and Gas Authority. This is confirmed by the rareincidences of conflict between the Italian regulatory authority, the transmitter and theshippers, and by the application of the regulatory document governing gas transmissionactivities (Network Code), which sets out in a clear and transparent manner all the rulesgoverning access by shippers to the gas transmission network, as reference for theregulation of energy transmission in the electricity sector.On 19 October 2004, the Electricity and Gas Authority approved the updated NetworkCode.


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Snam Rete Gas has made every effort to make available as much transmission capacity aspossible so as to guarantee allocations to all shippers requesting capacity and,subsequent to regulations issued by the Electricity and Gas Authority aimed atintroducing a regulated market for gas and transmission capacities, developed a VirtualTrading Point in 2004 which allows bilateral transactions between operators for thepurchase and sale of gas on a daily basis, thus contributing to increasing liquidity on themarket.

ShareholdersSnam Rete Gas has always worked with the objective of creating value for its shareholders,distinguishing itself for the total transparency of its relations with investors and thefinancial community.Snam Rete Gas has adopted a communication strategy which aims at creating a constant,correct and transparent dialogue with its institutional investors, its shareholders andwith the market.It is of the utmost importance, in fact, that investors are able to place their completetrust in the correctness and complete observance by the company of regulations andprocedures.Relations with investors, the market and the press are managed by a dedicated companyunit, known as “Relations with investors and the press”, which issues press releases andholds periodical meetings. It also promptly updates and makes available thedocumentation published on the Snam Rete Gas Internet site, following the relatedConsob (Securities and Exchange Commission) recommendations. In fact, given thedissemination and impact of on-line communications, this institution demands entiretyand promptness in the publication of documents. Snam Rete Gas makes every effort tofavour the most proactive participation of its shareholders in the Meeting, considering itto be a concrete opportunity for dialogue and discussion between the company and itsinvestors. The ordinary shares issued by Snam Rete Gas have been quoted on the Milan StockExchange since 6 December 2001 and, on 18 March 2002, the Snam Rete Gas stock wasincluded in the MIB30 index, now known as the S&P Mib Index. During 2002, the stockwas included in the European indexes: FTSE, S&P Euro Indices and MSCI.During the year, the trend recorded by the Snam Rete Gas title was extremely positive,closing the year at a value of € 4.28 per share, a rate of appreciation of 27.4% comparedwith the closing value of 2003.

CommunityThe vast geographical extent of the pipeline network over almost all the nationalterritory implies constant contact with local communities and institutions. Snam ReteGas aims at establishing open dialogue to ensure greater understanding of specificrequirements, so as to increase acceptance of the presence of its installations in theterritory.

Relations established between Snam Rete Gas, Government Authorities and localinstitutions are mainly correlated with having filed applications for receiving theauthorisation necessary to build new pipelines and plants.In particular, before filing the request for authorisation, the general project is presentedto the Mayors of the communes affected by the pipeline routes, to whom a brochure isgiven in which the study on environmental impact is summarised. Snam Rete Gas met210 Mayors during 2004. These meetings have two objectives:■ describing the main characteristics of the project to the local government authorities,

as well as the authorization procedure that is followed, and the work phases andmorphological and re-vegetation works that are performed;

■ verifying with the authorities whether the works interfere with any future variationsto the current town-planning scheme or new infrastructures which the authoritieshave programmed.

During the procedure to obtain authorisation, Snam Rete Gas encourages the presenceof managers and officers from the institutions in charge of issuing authorisation duringinspections of open and restored work sites, in order to improve their knowledge oftechnical issues and of the results achieved, especially as concerns environmentalrestoration.

In 2004, Snam Rete Gas signed a protocol of accord with the Nebrodi Park in Sicily, toadopt the most appropriate planning solutions, in order to minimise impact with theenvironment of the Park while laying the new pipeline.Amongst others, the protocol establishes:■ the company ’s commitment to undertake campaigns of information and

communication in schools, with the aim of increasing awareness on the correct use ofenergy sources and, in particular, natural gas;

■ the company’s collaboration with the Park in disseminating, also for teaching andinformation purposes, the knowledge acquired during activities in the environmentalfield and with regard to restoration works.

Snam Rete Gas cooperates with local, national and international authorities and takespart in the work of numerous associations and committees, playing an active role andplacing its expertise at their disposal in order to promote improvements in varioussectors of activity.

Professional associations and committeesAIEE - Associazione Italiana Economisti dell’EnergiaANIPLA - Associazione Nazionale Italiana per l’AutomazioneAPCE - Associazione Protezione Corrosioni ElettroliticheATIG - Associazione Tecnica Italiana del GasCEI - Comitato Elettrotecnico ItalianoCIG - Comitato Italiano GasCTI - Comitato Termotecnico ItalianoEASEE-gas - European Association for the Streamlining of Energy-Exchange-GasEGIG - European Gas Pipeline Incident Data GroupEPRG - European Pipeline Research GroupEUROGAS - The European Union of the Natural Gas Industry (representing Eni)GERG - Groupe Européen de Recherches GazièresGIIGNL - Groupe International Des Importateurs de Gaz Naturel Liquéfié (representing Eni)GTE - Gas Transmission EuropeIATT - Italian Association for Trenchless TechnologyICIM - Istituto Certificazione Industriale per la MeccanicaUNI - Ente Nazionale di UnificazioneUNICHIM - Associazione per l’Unificazione nel settore dell’Industria ChimicaUNSIDER - Ente Italiano Unificazione Siderurgica

International standardisation associations and committees(acting as representative for Italian associations / committees):CEN - Comité Européen de Normalisation: (representing CIG, UNI and UNSIDER)CENELEC - Comité Européen de Normalisation Electrotechnique (representing CEI)CEOCOR - Comité pour l’Europe occidentale contre la corrosion des conduites souterraines(representing APCE)ECISS - European Committee for Iron and Steel Standardisation (representing UNSIDER)ISO - International Organization for Standardization (representing CIG, UNI and UNSIDER)

International gas associations (acting as representative for Italian associations):IGU - International Gas Union (representing ATIG)MARCOGAZ - Technical Association of the European Natural Gas Industry (representing ATIG)

SNAM RETE GAS PARTICIPATION IN NO-PROFIT ASSOCIATIONS


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The principal relations of co-operationconcerning environmental restorationactivities established over the last few yearsbetween Snam Rete Gas and dedicatedinstitutions are listed below.

Ministry of the Environment andLandscape ProtectionSnam Rete Gas has implementedinnovative restoration techniques, inconjunction with officers of the Ministry.For this purpose, the use of floweringplants, cuttings and indigenous shrubspecies has been experimented with insample areas through which the Mestre –Trieste and Montesano, on the Marcellana –Brindisi pipelines run.

Friuli Venetia Julia regionThe involvement of Snam Rete Gas wasrequested by the Regional Authorities –Department of Parks with regard to aproject for the planning and protection ofthe supranational environment, promotedby the European Union and concerning theprotected areas of three “regions” inCentral Europe: Slovenia, Carinthia, Friuli(INTERREG3 Project).The intention of the Community Directiveand, therefore, of the regional legislativeproject, is that of promoting open debatesin which the offices, associations and thoseoperating within the territories underprotection provide their contributiontowards defining the environmental values(fauna, flora), as well as the cultural andanthropological values, that characterisethe area being studied. Having constructedthe Malborghetto – Bordano pipeline, apart of which runs through the Alba Valley,Snam Rete Gas will be able to contribute tothe debates by illustrating the results of itsmonitoring, currently in progress, of theflora, soils and fauna.

In correspondence with the pipelinecrossing through natural meadows in theTagliamento Valley Site of CommunityInterest (SCI) Protected Area, techniques ofstripping the turf and topsoil of themeadows in the areas affected by theBordano – Flaibano pipeline were carriedout, in conjunction with the Friuli VenetiaJulia Regional Authorities – Department ofParks.

Province of Verbania Cusio OssolaAlong the distance covered by the exposedgravely bed of the Toce River in the areaaffected by the Masera - Mortara pipeline,Snam Rete Gas has implemented amonitoring programme of the fauna,particularly of the local birdlife. FollowingEEC Directives - Bioitaly project, an Area forthe Special Protection of Birdlife, known as“Greto del Toce”, was constituted.

Regional Agency for EnvironmentalProtection in Basilicata (ARPAB)The activities for the morphologicalrestoration and re-vegetation of the“Connection to the Commune ofCastelmezzano” pipeline are monitored byARPAB, with particular attention to thewooded areas situated in the Regional Parkcalled “Gallipoli Cognato and Lower LucaneDolomites”, and to the use of soilbioengineering techniques.

University of TriesteIn order to plan the re-vegetation works inFriuli Venetia Julia, relations of co-operation have been established with theFaculty of Biology of the University ofTrieste for implementing a monitoring andbotanical study programme that providedguidelines for planning restoration projectsand for verifying the restoration worksperformed on the previous pipeline forimport from Russia.

University of TurinA phyto-sociological study has beencompleted on test areas affected by theMasera – Mortara pipeline, with a view toproviding guidelines for planning re-vegetation works and evaluating theireffectiveness over a monitored period oftime.

University of AnconaProjects are in progress for the finalisation ofphyto-sociological studies, analyses of soilsand analyses of fauna in the areas affected bythe Campochiaro – Sulmona and Palmi –Martirano pipelines, with a view to providingguidelines for planning re-vegetation worksand evaluating their effectiveness over amonitored period of time.

University of PalermoA map of the vegetation in scale 1:10.000and a phyto-sociological study werecompleted, in order to better describe thenatural environment of the Nebrodi Parkwith the aim of evaluating appropriateplanning choices.

Nebrodi ParkIn line with the convention that regulatesrelations between Snam Rete Gas and theNebrodi Park, a joint Snam Rete Gas –Nebrodi Park scientific-technicalcommittee has been established toimplement the most appropriate planningchoices aimed at minimising impact on thePark’s environment, and promoting in-depth studies and their dissemination.

Maiella National ParkA programme is in progress for monitoringthe environments of the park throughwhich the Campochiaro – Sulmonapipeline crosses, and which are undergoingenvironmental restoration works(botanical, pedological and fauna studies).The routes defined and the mitigationtechniques adopted were established inconjunction with Park technicians and inaccordance with the regulations containedin the Environmental Impact AssessmentDecree.

Forestry Conference, Padua 2003In conjunction with A.I.P.I.N. (Associationfor Soil Bioengineering) during theinternational nursery gardening exhibition(MIFLOR) in Padua - Forestry Convention,the new environmental restorationtechniques tested by Snam Rete Gas overthe last few years were illustrated.

Mediterre Conference, Bari 2003In conjunction with the “Fiera del Levante”Exhibition, during the conferencespecialising on the Mediterranean area(Mediterre), Snam Rete Gas illustrated newrestoration techniques, with particularattention to the environmental restorationactivities performed in the maquis with theuse of transplanted wild shrubs.

PRINCIPAL RELATIONS OF CO-OPERATION BETWEEN SNAM RETE GAS AND INSTITUTIONS IN ENVIRONMENTAL RESTORATION


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In 2004, as in 2003, Snam Rete Gas provided financial support for the Puliamo il Mondoinitiative organised by the Italian environmental association, Legambiente. Knownoutside Italy as “Clean up the World” this event is the most important international pro-environment initiative involving volunteers and is promoted by the United NationsEnvironment Programme. In Italy, the event involved 1,800 local government authorities,schools and associations, with around 700,000 members of the public actively engaged incleaning up some 3,800 areas.

Snam Rete Gas sustains the activities undertaken by FAI, the Fund for the ItalianEnvironment. Born in 1975 as a private, non-profit foundation, FAI’s activities are directedtowards the protection, conservation and enhancement of Italy’s artistic and environmentalheritage, as well as towards education and training in related issues.

The company’s interest in art and culture is also expressed through the production ofeditorial initiatives, such as the publication of a calendar distributed in fifty thousandcopies. Since 2002, experts in photography and cultural institutions have beencollaborating in the project: in 2002, the photographer Ferdinando Scianna, with hissplendid views of Italy; in 2003 and in 2004, the Library of the University of Bolognaallowed the reproduction of the sixteenth-century watercolours by the naturalist-philosopher Ulisse Alrovandi and, in 2005, the photographer Aurelio Amendolacontributed his original shots of the splendid sculptures by Michelangelo.

In conjunction with Avis, the Association of Voluntary Italian Blood-donors, Snam ReteGas encourages the donation of blood by means of information campaigns conductedamongst its employees.

In order to satisfy requests received from a large number of institutions in Italy workingin the social field, Snam Rete Gas donates motor vehicles and personal computers whichhave been de-commissioned, but that are still in good working condition, to schools,volunteer associations and non-profit organisations.

Particular attention was paid to the community and territory of Portovenere (in theprovince of La Spezia), where the only re-gasification terminal of liquefied natural gas inItaly is located, managed by the controlled company GNL Italia S.p.A..

SuppliersContractual relationships with suppliers and contractors are based on principles oftransparency, loyalty and without discrimination.For Snam Rete Gas, an important criterion in selecting its suppliers and contractors is theirability to fulfil requirements not only of economic, technical, production andorganisational nature, but also their observance of requirements concerning health, safety,environment protection and quality, as well as their adherence to international labour laws.Snam Rete Gas makes use of a selection and qualification process handled by specificcompany units which, when necessary, enlist the support of other specialised departments.The approved suppliers/contractors are included in a Vendors List in accordance withcorporate procedures governing the assessment and supervision of suppliers and contractors.The contractors are asked to supply:■ a declaration of knowledge of the risks connected to the activities planned in the contract;■ documentation about the procedures and methods used for the management of

aspects of health, safety and the environment and on accident statistics.At the end of a contract, activities carried out by a contractor are assessed in order toestablish compliance with the company ’s requirements.

As regards the safety aspects of contract work performed by third parties, contractorswere duly informed about the hazards that exist and the preventive action andcontingency measures in place in company offices and facilities where they are working,the aim being to encourage coordination and cooperation.

The procurement process was analysed during 2004, with the aim of identifying areaswhere there may be room for improvement. The documents assessed were in regard tothe procedures, questionnaires and the documentation used both for qualifying and forassessing the performance of suppliers and contractors.

Orders placed by Snam Rete Gas in 2004 involved approximately 1,100 external suppliersfor a total value of approximately € 595 million. 90% of total orders were based in Italy,distributed over nineteen different regions.

250

500

750

1,000

2001 2002 20042003

Total orders (million €)

Italy 92.1% Extra-Europe 0.1%Europe 7.8%

Percentage breakdown of total orders

In 2004 Snam Rete Gas boughtservices and goods in Italy forabout € 548 million.The figure, in which the principalitems of expense incurred bySnam Rete Gas are indicated,shows how the construction

sector is the field which is mostaffected by Snam Rete Gas’sactivities, with an expenditureexceeding € 220 million.This figure also includesenvironmental restoration andconservation activities.

The other most relevantexpenditure items regard thepurchase of machinery andpiping (18%), professionalservices (12%), computerservices (12%), other services(17%).

Professional services 12%

Machinery and piping 18%

Computer technology 12%

Construction sector 41% Other services 17%

INDUCED TRADE ACTIVATED BY SNAM RETE GAS


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Principal economic sectors affected by demand from Snam Rete Gas

On the basis of this data, it canbe estimated that Snam ReteGas‘s demand procures inducedgoods and services for a total ofapproximately € 1,098 million,spread over various fields ofactivity, in addition to the € 548million attributed to primarypurchases. The constructionsector is the sector whichaccounts for the greatestamount of induced trade(approximately € 250 million).

The sector of professionalservices follows, accounting foran induced expenditure of€ 135 million. The sector concerning theproduction and working ofmetal products is alsoconspicuous, at approximately€ 94 million, as is that forcomputer equipment andrelated services, at more than€ 76 million.This evaluation was carried out

by the Eni Enrico MatteiFoundation by means of theInput Output matrix, or thetable of inter-dependenciesbetween sectors drawn up byISTAT (Central Institute ofStatistics), by which it ispossible to statisticallyestimate how much each eurogenerates when spent in eachof the various sectors affectedby Snam Rete Gas’s demandrequirements.

Breakdown of added value

Snam Rete Gas contributes to sustainable development through the economic growth ofthe context in which it operates, generating wealth and distributing it to itsstakeholders. After defining added value as the difference between revenues and costsincurred for the purchase of raw materials, goods and services, the allotment of thiswealth was estimated. The added value that then emerged represents Snam Rete Gas‘scapacity for creating wealth within the framework of operating profitability and fordistributing it amongst the various participants of the social context in which it works.

The graph below indicates, in millions of euros, the monetary flows that the lenders, theemployees, the State (through taxation), and the shareholders receive as a result of theperformance of company activities.

In 2004, Snam Rete Gas‘s total revenues amounted to approximately € 1,936 million,broken down as follows: transmission activities (€ 1,734 million); re-gasificationactivities (€ 34 million); non-regulated activities (€ 12 million); increases in fixed assetsas a result of internal works (€ 126 million); other revenues and income (€ 30 million).The total added value, amounting to € 1,579 million, was distributed for 61.1% amongstthe primary company stakeholders: shareholders (24.8%); the State (21%); employees(8.2%); lenders (7.1%). The remaining 38.9% was re-invested in business activities, in theform of amortization funds and reserves.

The positive growth recorded for investments deserves particular mention, increasing by13.7% compared to 2003. The sectors of growth are concentrated in the areas ofDevelopment (the upgrade of infrastructure) and Maintenance (restoration of pipelinesections, maintenance of safety levels and network adjustments).A positive trend was also recorded for net financial indebtedness which, amounting to€ 2,874 million, fell by € 246 million compared to 31 December 2003.

Internal and external communications

Snam Rete Gas has always recognised the importance of communicating with all partiesinvolved in sustainability processes. In fact, transparency is one of the key factors in thecompany ’s policy for good administration.

0 1,000

Million euro

2,000

Total revenues 1,936

Gross global added value 1,579

Company (1) 614

Lenders (2) 112

Employees (3) 130

State (4) 332

Shareholders (5) 391

Purchase of goods and services (6) 357

500 1,500

Breakdown of added value

(1) Amortization funds, reserves, extraordinary expenditure, dividendsurpluses on net profits.(2) Net passive interest allowed to the banking system.(3) Cost of labour, including salaries and wages, social expenditure,severance pay and other personnel-related costs.

(4) Income tax.(5) Total distributed dividends.(6) Costs for the production of raw materials, subsidiaries,consumption and goods, services, enjoyment of third-party assets.


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New information technologies have made communication processes faster and simplerboth inside and outside the company.

As regards internal communications in addition to traditional notice boards, Snam ReteGas has an in-house computer network known as Sinfonet. Sinfonet has been inoperation for several years, with progressive improvements in terms of contents andoperating processes in order to speed up the exchange of information throughout thecompany. The aim of the site is to provide all employees with access to a regularlyupdated flow of information about matters relating to their areas of activity and informthem about the company’s operations and strategies, thus acquainting them with thecompany ’s decision-making processes. Sinfonet has also become the main source ofinformation on social initiatives and events.A dedicated Health Safety Environment area can be accessed, with an up-to-date flow ofinformation on the following issues: HSE legislation, circulars and documents regardingapplication of the laws, management system documents, audit programmes, safety datasheets regarding dangerous substances, injury rates.Electronic mail has also proved to be a fast and extremely popular means of communication.

Regarding external communications with stakeholders, in addition to the publication ofthe annual report and this HSE report, information is available on the Internet(www.snamretegas.it), presentations, participations in congresses and conventions, andin a variety of brochures illustrating corporate activities.It is estimated that the HSE report will have a circulation of more than 2,000, comprisingcustomers, shareholders, suppliers, authorities and members of the general public.Snam Rete Gas’s website is organised on the basis of well-defined sections where it ispossible to access information on the company, its background and the regulatoryframework in which it operates. The company’s main publications (quarterly, half-yearlyand annual reports, HSE reports) are available as PDF files in the “Documents” section.Lastly, the site makes it possible for all authorised gas market operators to engage incommercial relations with Snam Rete Gas. By accessing the specific “Business Area ”, aninformation service and interactive tools are available for all operations connected withthe purchase, sale and transmission of natural gas.

Activities concerning the company’s Internet and Sinfonet sites are the responsibility ofthe Personnel and Organisation Department and are performed by a dedicatedCorporate Image Coordination unit.

Technological innovation and research

Snam Rete Gas continued its studies and research efforts in 2004 with the aim ofreducing the environmental impact of its activities and identifying new technologiesthat ensure a safe and reliable transmission network and instruments capable ofproviding technical/economic indicators to support the efficient and effectivemanagement of the network itself.Pursuit of these objectives also involved some important initiatives in collaborationwith international research organisations, such as GERG (Groupe Européen deRecherches Gazières), Italian universities and transmission companies based in andoutside Europe.

More specifically, activities were undertaken to:■ assess the environmental and energy aspects of natural gas transmission and use;■ estimate natural gas emissions from the transmission network; ■ assess the possibility of applying satellite radar technology (interferometry)

integrated with information originating from thematic maps and from historical datameasured by on-site instrumentation, to identify and monitor unstable areas alongthe pipeline route;


2004 REPORT


46

■ experiment with the use of polyethylene pipes, (“trench-duct pipe” project) laid inunstable areas for housing the section of pipeline affected by a land shift. Thistechnique makes it possible to mitigate the effects of landslides on pipelines. The firston-site application of this new technology will be implemented in the near future;

■ assess the performance of geometric and geometric-inertial pigs used to inspect thecharacteristics of pipelines affected by landslides;

■ develop a software program, in the framework of international co-operation, forassessing the safety of compressor stations;

■ develop and update, again in the framework of international co-operation, modelsprepared on the basis of international data banks for evaluating the frequency ofdamage to transmission pipelines;

■ develop an instrument for assessing the safety of plants and line points along the gastransmission network;

■ the HPT project (High Pressure Transmission), in conjunction with other companiesin the Eni Group, to identify solutions to problems concerning materials, welds,external and internal coatings, and to research new cathodic protection devices forconstructing on-shore large-diameter, long-distance, high-pressure pipelines laid inremote places;

■ experiment with the technology, proposed by Snam Rete Gas within the framework ofrelations with GERG (Groupe Européen de Recherches Gazières), which makes use of alaser signal transmitted along an optic fibre in the telecommunications cableinstalled alongside the pipeline for monitoring interference caused by machinesoperating nearby;

■ identify, in collaboration with the European Pipeline Research Group (EPRG), alaboratory method for assessing the effect of aggressive external environments on theevolution of mechanical damage to pipelines caused by machines operating nearby;

■ complete the computerised map-making system (SIGAS), which integrates a CADsystem with a wide-spectrum GIS and is integrated with the recent companyinformatic systems;

■ start-up the RADICA project which, for maintenance purposes, comprises the on-siteuse of apparatus for visualising, opening and taking stock of job orders and warningson the company informatic systems.

Quality

The commitment pledged by Snam Rete Gas towards supplying its stakeholders withtransparent and certified services was proven once again in 2004 with the renewal,subsequent to an audit, of certification of the quality management system for naturalgas dispatching services throughout Snam Rete Gas’s network in Italy, released in 2003by DNV (Den Norske Veritas Italia).Three audits were performed on the dispatching process, comprising two carried out byan internal team and one externally, in order to verify the application and effectivenessof the management system.

The Snam Rete Gas laboratory, which carries out the analysis of the composition ofnatural gas transmitted by the network, has achieved SIT (Italian Calibration System)accreditation – code number 155 – as a Centre for the Calibration of Natural Gasmixtures, the first in Italy in the gas sector.


2004 REPORT

GNL ITALIA

47

GNL Italia, controlled 100% by Snam Rete Gas, carries out liquefied natural gas re-gasification activities and operates the Panigaglia terminal, located in the Fezzano diPortovenere district (province of La Spezia).This terminal is the only plant in Italy that receives and re-gasifies liquefied natural gas.Built between 1967 and 1970, it was revamped between 1990 and 1996 in order toprocess light liquefied natural gas. When revamping, special care was taken to ensurethat the terminal blended in with its surroundings on the basis of a project prepared bythe University of Genoa ’s School of Landscape Architecture.

The terminal covers an area of some 45,000 square metres and consists of two storagetanks, each with a capacity of 50,000 cubic metres, vaporisation equipment and a berthfor the gas tankers.The criteria for the design, construction and operation of the terminal comply with verystringent international regulations and involve state-of-the-art technology in terms ofsafety and environmental protection.

A total of 68 gas tankers berthed at the terminal in 2004 to unload liquefied natural gas.

The liquefied natural gas unloaded from the tankers is sent to the two storage tanks at atemperature of around -160 °C. Subsequently, it is reconverted to the gaseous phase in asimple heating operation and sent into the gas pipeline network.

The LNG terminal site operates a UNI EN ISO 14001 certified environmental managementsystem. This system is integrated with a plant safety management system complying withLegislative Decree 334/99. In July 2004, DNV Italia (Den Norske Veritas) carried out the auditneeded to maintain certified status, which was subsequently confirmed.

GNL Italia


2004 REPORT

GNL ITALIA

48

The environmental and safety programs were defined with a view to continuousimprovement within the framework of the environmental and safety managementsystem of the liquefied natural gas re-gasification terminal.

Objectives Targets

- Improve waste water management Connection of the sewage system from officebuildings to the main drainage system,by 31/12/2005

- Eliminate ozone-depleting substances Finalisation of a study for the replacementof coolant in the air-conditioning systems,by 31/12/2005

- Improve reliability of atmospheric emissions Replacement of the instrument used for monitoring detecting NOx in the vaporisation equipment

combustion fumes, by 31/12/2005

- Optimise use of natural resources Evaluation of the possibility for energy recoveryfrom the LNG secondary pumps, by 31/12/2005

- Optimise access to process information Computerisation of the plant machineryand process lay-outs, by 31/12/2005

- Improve safety for the mooring and presence Development of base engineering for of gas tankers at the wharf the implementation of safety measures

at the wharf, by 31/12/2005

Environmental and safety improvement objectives and targets achieved in 2004

Objectives Targets

- Use best available technology Installation of a new automatic PLC(programmed logic controller) system

- Improve internal communications Extension of the range and integration of the (including communications in emergencies) intercom/public-address system in the plant

and in offices

- Prevent accidental discharges Conversion of diesel tank from single- to (surface and subsurface) double-wall type with an alarm system to detect

leakage

- Optimise use of natural resources Completion of a study to install a photovoltaicsystem for the production of electricity

- Upgrade the system to detect an explosive Installation of devices to detect an explosiveatmosphere atmosphere near the pumps (P-201)

- Improve the reliability of the LNG density Replacement of existing instruments with latest measuring system generation instruments.

New objectives and targets in 2005 environmental and safety programme


2004 REPORT

GNL ITALIA

49

In 2004, the terminal sent approximately 2.1 billion cubic metres of gas into thenetwork, consuming about 1,240 TJ of energy.

Activities at the terminal caused the following atmospheric emissions: approximately 42tonnes of nitrogen oxides, 26 tonnes of carbon monoxide and 54,100 tonnes of carbondioxide.Natural gas emissions totalled approximately 1.9 million cubic metres, whereas sulphuroxide and particulate emissions are negligible.

Waste production, originating mainly from maintenance activities, amounted toapproximately 105 tonnes. Non hazardous waste accounted for 90% of the total and 31%was recovered.Water consumption consists mainly of sea-water (4 million cubic metres) which is usedto cool auxiliary power plants.

Regarding accidents in 2004, four injuries were recorded compared with seven in 2003,none of which were serious. These comprised one caused by a road accident whencommuting, two attributable to occupational hazards and one to general hazards.

Analysis of injury statistics, compared with 2003, shows a substantial reduction in boththe frequency rate (from 49.9 to 27.8) and the severity rate (from 1.77 to 0.16), influencedrespectively by a 43% reduction in the number of injuries and 91% of the days of absencefrom work.

The accidents that occurred were analysed with all personnel during periodic meetingsheld for information and awareness-raising purposes, in order to assess their dynamicsand plan appropriate action to keep them from happening again.

20042000 2001 2002

0.5

1

1.5

2

2003

Energy consumption/LNG sent through the network (%)

Snam Rete Gasperformance indicators

Activity indicators

2000 2001 2002 2003 2004

Natural gas pipeline network (km) 29,111 29,607 29,795 30,120 30,545

Natural gas sent into network (109m3) 73.1 70.38 74.40 76.37 80.41

Average distance travelled by natural gas in Italy (km) 503 442 430 484 485

LNG sent into network (109m3) 3.5 3.6 3,6 3.5 2.1

Pressure reduction plants (no) 560 560 560 563 558

Compressor stations (no) 10 10 11 11 11

Power rating in compressor stations (MW) 588 588 621 621 625

Environmental data

2000 2001 2002 2003 2004

Energy consumption (TJ) 12,058 9,480 9,314 8,816 10,335

Natural gas emissions (106 m3) 47 38 37 37 49

CO2 emissions (103 t) 634 492 484 459 543

CO2 eq. emissions (103 t) 1,241 995 974 959 1,197

NOx emissions (t) 1,628 1,157 1,055 1,019 1,245

CO emissions (t) 678 526 486 412 468

Particulate emissions (t) 42 37 36 27 29

SOx emissions (t) 6 5 4 4 4

Total waste production (t) 1,146 1,471 1,279 860 1,756

Non-hazardous waste production (t) 1,062 1,374 1,121 784 1,569

Hazardous waste production (t) 85 97 158 76 187

Water consumption (103 m3) 5,659 4,852 4,627 4,662 4,332

Waste water (103 m3) 4,676 4,614 4,468 4,516 4,245


2004 REPORT

PERFORMANCE INDICATORS

50

Environmental performance indicators

2000 2001 2002 2003 2004

Energy consumption for transmission/energy transmitted (%) 0.37 0.29 0.27 0.25 0.31

Energy consumption for transmission/energy transmitted *av.dist.trav. (%/103km) 0.75 0.66 0.64 0.52 0.63

Energy consumption for re-gasification/LNG sent into network (%) 1.73 1.62 1.59 1.64 1.68

Natural gas emissions for transmission/natural gas transmitted (%) 0.050 0.049 0.048 0.048 0.058

CO2 emissions for transmission/natural gas transmitted (kg/106m3) 7,110 5,478 5,180 4,719 5,957

CO2 eq. emissions for transmission/natural gas transmitted (kg/106 m3) 13,836 12,401 11,621 11,190 13,816

NOx emissions for transmission/natural gas transmitted (kg/106 m3) 20 15 13 12 14

HSE expenditure (thousand €)

2000 2001 2002 2003 2004

Cap. Ex Op. Cap. Ex Op. Cap. Ex Op. Cap. Ex Op. Cap Ex. Op.

Air/climate protection 1,350 593 2,737 728 5,718 857 5,758 858 24,252 1,021

Waste water management 6 105 14 118 10 74 107 74 125 87

Waste treatment 8 504 106 517 53 545 37 441 153 509

Soil protection 73 54 533 124 254 158 722 89 17 85

Noise/vibration abatement 264 25 324 30 0 708 186 16 24 18

Landscape/nature protection and environmental

restoration 8,189 9,386 32,078 11,212 27,751 9,461 22,349 7,935 22,202 5,602

Research and development 0 513 0 280 554 302 214 285 0 254

Other environmental protection activities 6,456 7,616 4,418 2,991 3,540 3,111 3,003 3,036 5,706 2,895

Health and safety 2,086 7,644 1,729 6,103 1,392 5,534 3,004 6,799 8,255 5,516

HSE training 0 455 0 418 0 244 0 227 0 230

Total 18,432 26,895 41,939 22,521 39,272 20,994 35,380 19,760 60,734 16,217

Total (capital expenditures and operating expenses) 45,327 64,460 60,266 55,140 76.951


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PERFORMANCE INDICATORS

51


2004 REPORT

VERIFICATION OF THE REPORT

52

verification of the report


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VERIFICATION OF THE REPORT

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Format control

Snam Rete Gas - Health Safety Environment

Publishing coordination

Snam Rete Gas - Corporate Image Coordination

Graphics

Orecchio Acerbo

Pre-printing

46xy Milan

Printing

Grafiche Mariano S.p.A.

Printed on ecological paper

May 2005

For enquiries:Snam Rete Gas SpA/Health Safety Environment Dept.Piazza Santa Barbara, 7 - 20097 San Donato Milanese (MI)Tel. +39.02.5201 - Fax +39.02.520.38428e-mail: [email protected] - Website: www.snamretegas.it

Cover: Lorenzo Mattotti, Il garante

Health Safety Environment 2004 report

Piazza Santa Barbara, 720097 San Donato Milanese - MilanoTel. +39 02 5201www.snamretegas.it