Snam's Strategic Move to Acquire Higas: Assessing the Implications for European Energy Investors

In 2025, Snam, Italy's leading energy infrastructure operator, has positioned itself at the forefront of Europe's energy transition by pursuing high-impact strategic initiatives. Among these, the exclusivity agreement with Higas-a Sardinian LNG terminal operator-stands out as a pivotal move. This agreement, signed in April 2025, grants Snam the right to assess and negotiate the acquisition of 100% of Higas' shares, alongside plans to convert the Oristano LNG coastal storage facility into a floating storage and regasification unit (FSRU), according to a Reuters report. While the specific terms and duration of the exclusivity agreement remain undisclosed, its strategic and financial implications for European energy investors are profound.

Strategic Rationale: Strengthening Energy Security and Diversification

Snam's interest in Higas aligns with its broader Snam's 2025–2029 plan, which allocates €12.4 billion to modernize and expand gas infrastructure, including LNG terminals, hydrogen-ready pipelines, and carbon capture projects. The Oristano FSRU, if finalized, would enhance Italy's energy security by diversifying gas supply routes and reducing reliance on traditional import corridors. This is particularly critical as the European Union accelerates its decarbonization agenda while grappling with geopolitical uncertainties in energy supply chains.

The Higas acquisition also complements Snam's recent efforts to expand its European footprint. For instance, its stalled €920 million acquisition of a 24.99% stake in Open Grid Europe (OGE), Germany's leading gas transport operator, underscores its ambition to create a pan-European multi-molecule infrastructure network, as reported by Financiallike. While regulatory delays have pushed back the OGE deal, the Higas agreement demonstrates Snam's agility in pursuing complementary assets in Southern Europe, where LNG infrastructure is a strategic priority.

Financial Implications: Balancing Growth and Debt

Snam's aggressive investment strategy comes with financial risks. The company's 2025–2029 plan projects net debt rising to €21.2 billion by 2029, driven by capital expenditures and dividend commitments. However, its robust financial performance-evidenced by an 8.3% year-on-year increase in Q1 2025 adjusted EBITDA to €761 million, according to its Q1 2025 presentation-suggests capacity to manage this debt. The Higas deal, if financed prudently, could enhance returns by integrating a high-growth LNG asset into Snam's portfolio.

The conversion of Oristano into an FSRU also aligns with Snam's energy transition goals. By enabling the injection of regasified LNG into Italy's transmission network, the project supports the integration of renewable gases like biomethane and hydrogen, as noted in the Reuters report. This dual-purpose infrastructure could attract EU subsidies under the European Taxonomy, with 28% of Snam's current capex already aligned with sustainable finance criteria (as detailed in its Q1 2025 presentation).

Risks and Geopolitical Considerations

Despite its strategic merits, the Higas deal is not without challenges. Regulatory scrutiny of cross-border energy investments-exemplified by the delayed OGE acquisition-highlights the political sensitivities surrounding foreign ownership in critical infrastructure, a point underscored by Financiallike. Germany's concerns over Chinese influence in Snam's ownership structure, for instance, could complicate future expansions in Northern Europe. Investors must also weigh the volatility of LNG markets, where prices remain subject to global geopolitical shifts and EU carbon pricing dynamics.

Conclusion: A Calculated Bet on Europe's Energy Future

For European energy investors, Snam's exclusivity agreement with Higas represents a calculated bet on the convergence of energy security and decarbonization. While the lack of detailed terms for the agreement introduces uncertainty, the broader strategic context-Snam's €12.4 billion investment plan, its track record in regulated infrastructure, and its alignment with EU sustainability goals-suggests a high probability of long-term value creation. However, investors should monitor regulatory developments and Snam's ability to execute its European expansion amid geopolitical headwinds.