Edison: the Rovigo Regasification terminal begins its journey to Italy

This facility will supply 10% of Italy’s demand for natural gas. Thanks to a 25-year contract with Qatar, Edison secured the supply of 6.4 billion cubic meters per year of natural gas, equal to 80% of the terminal’s regasification capacity.

Milan, September 1, 2008 – The liquefied natural gas (LNG) regasification terminal that was being built at a dock yard in Algeciras, near the Strait of Gibraltar, has begun its journey to its Adriatic Sea home, offshore Porto Levante, in the province of Rovigo. The terminal has a regasification capacity of 8 billion cubic meters of natural gas a year, equal to 10% of Italy’s demand for natural gas and about 10% of installed LNG regasification capacity in Europe imports of LNG. This new facility will make a significant contribution to bridging the natural gas production gap that exists in Italy, where market demand is expected to grow at an about 2% annual rate between 2008 and 2013.

Edison, which began this project more than 10 year ago, currently has a 10% interest in Terminale GNL Adriatico Srl, the company that is building the facility. However under an LNG sales agreement with Ras Laffan LNG II (a joint venture of Qatar Petroleum and ExxonMobil), it has secured the right to use 80% of the terminal’s regasification capacity, equal to 6.4 billion cubic meters of natural gas a year. The remaining 20% will be available to market operators in accordance with procedures defined by the Italian Electric Power and Natural Gas Authority. The other partners in this project, each with a 45% interest in Terminale GNL Adriatico Srl, are Qatar Terminal Limited and ExxonMobil Italiana Gas.

“This project is of fundamental importance for Edison and Italy as a whole,” said Umberto Quadrino, Edison’s Chief Executive Officer. “Italy uses natural gas to produce 60% of its electric power and, until now, it imported most of its natural gas from Russia, the North Sea, Libya and Algeria. With this new infrastructure and the related supply contracts, Edison opens a new route for the supply of natural gas and, by importing LNG from a country that until now was not linked with Italy, increases the reliability of the national energy system and helps diversify the country’s supply sources.”

”This regasification terminal is an example of technological excellence, as the first reinforced-concrete offshore facility in the world capable of receiving, storing and regasifying LNG,” added Pietro Cavanna, head of Edison’s Hydrocarbons Business Unit. “We are particularly proud of this terminal because, after many years, it is the first facility that, by creating a new avenue for the importation of natural gas, will enable Italy to look at its energy future with greater confidence.”

The commissioning of the new terminal will bring Edison closer to achieving the growth objectives of its hydrocarbons operations, which call for the Group to attain full autonomy for its natural gas supply need by increasing its natural gas availability from the current 13 billion cubic meters a year to 23 billion cubic meters a year by 2013. As part of the same growth plan, Edison is developing two additional infrastructures: the Galsi and ITGI natural gas pipelines. These facilities, which are scheduled to go on stream in 2012, will increase natural gas importation capacity by 16 billion cubic meters. Specifically, Galsi will link Algeria with Sardinia and Tuscany. Edison, who is the project’s main Italian partner, has already signed a contract with Sonatrach, an Algerian company, to import 3 billion cubic meters of natural gas a year. The ITGI project is an energy corridor that will link Italy with the Caspian Sea Basin, by way of Greece and Turkey. Edison has already secured access to 80% of the transmission capacity of the Italy-Greece segment and is currently negotiating the necessary gas supply contracts with the producing countries.

Four tug boats will tow the regasification terminal over the 1,700 nautical miles that separate Algeciras from the Northern Adriatic during a trip that will last about 22 days. After reaching the designated location, about 15 kilometers offshore the Veneto coast, the terminal will be permanently positioned on the seabed in water about 28 meters deep. Subsequently, a docking systems for LNG ships will be installed and the terminal will be connected to a natural gas pipeline (already completed) that will bring the natural gas to shore.

Following final hook up and completion in the Adriatic, the terminal will undergo a period of commissioning and testing to ensure readiness for operations before reaching full operational capacity in 2009. The natural gas for this project will be supplied from Qatar’s North Field, which is the largest natural gas deposit in the world with reserves of more than 25,000 billion cubic meters, and will be liquefied with modern liquefaction trains in Qatar.

Public disclosure required by Consob Resolution No. 11971 of May 14, 1999, as amended.

APPENDIX
TECHNICAL DATA ON THE ADRIATIC LNG TERMINAL
The structure (Gravity Based Structure or GBS) is made of reinforced concrete, and weighs about 290,000 tons. It is 180 meters long, 88 meters wide and 47 meters high: larger than two soccer fields and as high as a ten-floor building most of which will be under water. Inside the concrete structure are two LNG storage tanks, each with a working capacity of 125,000 cubic meters, and on the top are located the regasification plant and the auxiliary facilities, including a gas turbine module for power generation, a helicopter platform and living quarters. Once the terminal is on site, it will be located on the sea bed, in waters approximately 28 meters deep, and stabilized by filling the infrastructure with sand and water ballast. The mooring and LNG unloading facilities are designed and tested to safely receive LNG ships of differing tonnages. The terminal will be connected to the Italian gas network by pipeline. The first route, built by Terminale GNL Adriatico, crosses 15 km of sea, 10 km of the Po river delta and 15 km of wetlands, reaching the metering station at Cavarzere (Venice province). The second pipeline route 84 km in length, built by Edison, will transport the gas from Cavarzere to the national gas pipeline hub, near Minerbio (Bologna province). The plant and its associated structures have been constructed according to international standards of safety and environmental protection. The project has completed four Environmental Impact Assessments and the consultation with Italian authorities has led to the adoption of more than 100 specific environmental protection measures and the implementation of a comprehensive monitoring program, both for the construction and operational phases.

LNG
LNG is natural gas which is cooled to -162° C until it shrinks to a liquid that is 600 times smaller than its original volume. Liquefaction of most of the natural gas for the Adriatic LNG terminal will be carried out by Ras Laffan LNG II in Ras Laffan city (State of Qatar). The liquefied gas will be transported by special ships. Five ships have been built and are ready to cover the route to the Adriatic Sea: the new LNG regasification terminal will be served weekly by ships coming from Ras Laffan. LNG terminals and ships are designed and constructed with safety as a priority. Industry standards, codes, training, and operating procedures as well as government regulations are in place for the safe design, construction and operation of LNG terminals and ships. In LNG’s 45-plus year shipping history, LNG carriers have traveled more than 100 million miles without a major incident. The LNG industry has effectively bridged the distance between some of the world’s largest - but often remote – gas fields and the countries that seek additional sources of supply. By transporting LNG via ships, we can make energy resources available in parts of the world where they would otherwise be inaccessible. Liquefaction technology has resulted in accelerating LNG use worldwide: today LNG represents around 25% of the international gas trade. In Italy, however, LNG currently represents only 5% of imported gas volumes, but it will play an increasing role by diversifying the traditional sources of energy imports and thus contributing to the security and competitiveness of Italy’s energy supplies.