ENI fined 209m EURO

13 April 2006

Eutimio Monaco

February 2006

The Italian Competition Authority has decided that ENI had abused its dominant market position by hindering the entry of independent operators into the national market for the wholesale supply of natural gas. Specifically, ENI discontinued work on upgrades to the Trans-Tunisian Pipeline Company (TTPC) gas pipeline, which had been started some time before, and for which "ship or pay" transport contracts had already been signed with a number of shippers.

For this reason, the Authority has imposed a fine of EUR 290 million, ordering ENI to cease its anti-competitive conduct. Additionally it has ordered ENI’s subsidiary, TTPC, to give third parties access by 1 October 2008 to 6.5 billion cubic metres per annum of additional gas transport capacity via the TTPC pipeline. ENI must guarantee that a first tranche of the additional capacity, equivalent to 3.2 billion cubic metres per annum, comes on line no later than 1 April 2008 and a second tranche equivalent to 3.3 billion cubic metres, no later than 1 October 2008. ENI has already undertaken to implement these increases.

ENI must also provide the Authority with documentation on its procedure for allocating the second tranche of the additional TTPC capacity to prove that the criteria to be used are indeed objective and not discriminatory. Subsequently it must submit a report after 90 days on the progress of the allocation procedure for the second tranche.

The infringement will result in a shortfall of 6.5 billion cubic metres of gas in the market for the period from March 2007 (the date by which the upgrade to the TTCP gas pipeline was originally supposed to be completed) and April 2008. For the remaining period from April 2008 to October 2008, the effect has been quantified at a loss to the market of 3.3 billion cubic metres of gas. The cumulative effect of the anti-competitive conduct in question, in spite of the measures proposed by ENI regarding the TTPC gas pipeline, is equivalent to 9.8 billion cubic metres of gas over a period of 19 months. This is a substantial volume, whether compared to annual consumption (80 billion cubic metres of gas in 2004 and about 86 billion cubic metres in 2005) or to the proportion supplied by ENI (approximately 53 billion cubic metres in 2004).

In the view of the Authority, which began its investigation on 27 January 2005, ENI's conduct constitutes a serious breach of Article 82 of the EC Treaty. In determining the amount of the fine, the Authority also took into consideration the fact that ENI, during the course of the proceedings, had begun the procedure for allocating the additional capacity resulting from the first upgrade to the TTPC pipeline. ENI's recent undertakings were viewed favourably by the Authority.

Source: AGCM press release of 15 February 2006, available at: