Obligation Snamprogetti 1% ( XS2051660509 ) en EUR

Société émettrice Snamprogetti
Prix sur le marché 100 %  ▲ 
Pays  Italie
Code ISIN  XS2051660509 ( en EUR )
Coupon 1% par an ( paiement annuel )
Echéance 12/09/2034 - Obligation échue



Prospectus brochure de l'obligation Snam S.p.A XS2051660509 en EUR 1%, échue


Montant Minimal /
Montant de l'émission /
Description détaillée Snam S.p.A. est une société italienne d'énergie opérant dans le transport et le stockage de gaz naturel, ainsi que dans les énergies renouvelables.

L'Obligation émise par Snamprogetti ( Italie ) , en EUR, avec le code ISIN XS2051660509, paye un coupon de 1% par an.
Le paiement des coupons est annuel et la maturité de l'Obligation est le 12/09/2034









Snam S.p.A.
(incorporated with limited liability in the Republic of Italy)
10,000,000,000
Euro Medium Term Note Programme
_______________________________
Under this 10,000,000,000 Euro Medium Term Note Programme (the " Programme"), Snam S.p.A. (the " Issuer" or " Snam") may from time to time issue notes (the
" Notes") denominated in any currency agreed between the Issuer and the relevant Dealer (as defined below).
The maximum aggregate nominal amount of all Notes from time to time outstanding under the P rogramme will not exceed 10,000,000,000 (or its equivalent in other
currencies calculated as described in the P rogramme Agreement described herein), subject to increase as described herein.
The Notes may be issued on a continuing basis to one or more of the Dealers specified under " Overview of the Programme" and any additional Dealer appointed under the
Programme from time to time by the Issuer (each a " Dealer" and together the "Dealers"), which appointment may be for a specific issue or on an ongoing basis. References
in this Base Prospectus to the " relevant Dealer" shall, in the case of an issue of Notes being (or intended to be) subscribed by more than one Dealer, be to all Dealers
agreeing to subscribe such Notes.
An investment in Notes issued under the Programme involves certain risks. For a discussion of these risks see "Risk Factors".
Application has been made to the Commission de Surveillance du Secteur Financier (the " CSSF") in its capacity as competent authority under the Luxembourg Act dated
10 July 2005 on prospectuses for securities (the " Prospectus Act 2005") to approve this document as a base prospectus. The CSSF assumes no responsibility for the
economic and financial soundness of the transactions contemplated by this Base Prospectus or the quality or solvency of the I ssuer in accordance with Article 7(7) of the
P rospectus Act 2005. Application has also been made to the Luxembourg Stock Exchange for Notes issued under the P rogramme to be admitted to trading on the
Luxembourg Stock Exchange's regulated market and to be listed on the Official List of the Luxembourg Stock Exchange.
References in this Base Prospectus to Notes being " listed" (and all related references) shall mean that such Notes have been admit ed to trading on the Luxembourg Stock
Exchange's regulated market and have been admit ed to the Oficial List of the Luxembourg Stock Exchange. The Luxembourg Stock Exchange's regulated market is a
regulated market for the purposes of the Markets in Financial Instruments Directive (Directive 2014/65/EU).
The requirement to publish a prospectus under the Prospectus Directive only applies to Notes which are to be admitted to tradin g on a regulated market in the European
Economic Area and/or offered to the public in the European Economic Area other than in circumstances where an exemption is available under Article 3.2 of the Prospectus
Directive (as implemented in the relevant Member State(s)).
Notice of the aggregate nominal amount of Notes, interest (if any) payable in respect of Notes, the issue price of Notes and certain other information which is applicable to
each Tranche (as defined under " Terms and Conditions of the Notes") of Notes will be set out in a final terms document (the " Final Terms") which, with respect to Notes to
be listed, will be filed with the CSSF. Copies of Final Terms in relation to Notes to be listed on the Official List of the Luxembourg Stock Exchange will also be published
on the website of the Luxembourg Stock Exchange (www.bourse.lu).
The P rogramme provides that Notes may be listed or admitted to trading, as the case may be, on such other or further stock exchanges or markets as may be agreed between
the Issuer and the relevant Dealer. The Issuer may also issue unlisted Notes and/or Notes not admitted to trading on any market.
The Issuer may agree with any Dealer that Notes may be issued in a form not contemplated by the Terms and Conditions of the Notes herein, in which event a supplement to
the Base P rospectus, a new Base Prospectus or a drawdown prospectus, in the case of listed Notes only, if appropriate, will be made availa ble which will describe the effect
of the agreement reached in relation to such Notes.
The rating of certain Series of Notes to be issued under the Programme may be specified in the applicable Final Terms. Whether or not each credit rating applied for in
relation to relevant Series of Notes will be issued by a credit rating agency established in the European Union and registere d under Regulation (EC) No. 1060/2009 (as
amended) (the "CRA Regulation"), and included in the list of credit rating agencies published by the European Securities and Markets Authority on its webs ite (at
http://www.esma.europa.eu/page/List- registered-and-certified-CRAs) in accordance with the CRA Regulation, will be disclosed in the Final Terms. A security rating is not
a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at any time b y the assigning rating agency. P lease also refer to
" Risks related to the market generally" in the " Risk Factors" section of this Base Prospectus.
Amounts payable under the Notes may be calculated by reference to either EURIBOR, LIBOR, CMS Rate, Constant Maturity BTP Rate or such other Inflation Index as
specified in the relevant Final Terms. As at the date of this Base Prospectus, the administrator of LIBOR and CMS Rate is, an d the administrators of EURIBOR and Constant
Maturity BTP Rate are not, included on the register of administrators and benchmarks established and maintained by the European Securities and Markets Authority pursuant
to article 36 of Regulation (EU) no. 2016/1011 (the " BMR").
As far as the Issuer is aware, the transitional provisions in Article 51 of the BMR apply, such that EMMI (European Money Market Institu te), as administrator of EURIBOR,
and the administrators of Constant Maturity BTP Rate, are not currently required to obtain authorisation or registration (or, if located outside the European Union,
recognition, endorsement or equivalence).
Arranger
BNP P ARIBAS
Dealers
Banco Bilbao Vizcaya Argentaria, S.A.
Banca IMI
BNP P ARIBAS
Barclays
Citigroup
BofA Merrill Lynch
Goldman Sachs International
Crédit Agricole CIB
HSBC
ING
J.P . Morgan
Mediobanca
MUFG
Mizuho Securities
Morgan Stanley
NatWest Markets
SMBC Nikko
Société Générale Corporate & Investment Banking
UniCredit Bank
The date of this Base P rospectus is 31 October 2018.







This Base Prospectus comprises a base prospectus in respect of all Notes issued under the Programme
for the purposes of Article 5.4 of the Prospectus Directive. "Prospectus Directive" means
Directive 2003/71/EC (as amended or superseded) and includes any relevant implementing measure in a
relevant Member State of the European Economic Area.
The Issuer (the "Responsible Person") accepts responsibility for the information contained in this Base
Prospectus and the Final Terms for each Tranche of Notes issued under the Programme. To the best of
the knowledge of the Issuer (having taken all reasonable care to ensure that such is the case) the
information contained in this Base Prospectus is in accordance with the facts and does not omit
anything likely to affect the import of such information.
Copies of Final Terms will be available from the registered office of the Issuer and the specified office
set out below of each of the Paying Agents (as defined below).
This Base Prospectus is to be read in conjunction with all documents which are deemed to be
incorporated herein by reference (see "Documents Incorporated by Reference"). This Base Prospectus
shall be read and construed on the basis that such documents are incorporated by reference and form
part of this Base Prospectus.
The Dealers have not independently verified the information contained herein. Accordingly, no
representation, warranty or undertaking, express or implied, is made and no responsibility or liability
is accepted by the Dealers as to the accuracy or completeness of the information contained or
incorporated by reference in this Base Prospectus or any other information provided by the Issuer in
connection with the Programme. No Dealer accepts any liability in relation to the information
contained or incorporated by reference in this Base Prospectus or any other information provided by
the Issuer in connection with the Programme.
This Base Prospectus contains industry and customer-related data as well as calculations taken from
industry reports, market research reports, publicly available information and commercial publications.
It is hereby confirmed that (a) to the extent that information reproduced herein derives from a third
party, such information has been accurately reproduced and (b) insofar as the Issuer is aware and is
able to ascertain from information derived from a third party, no facts have been omitted which would
render the information reproduced inaccurate or misleading.
No person is or has been authorised by the Issuer or any Dealer to give any information or to make any
representation not contained in or not consistent with this Base Prospectus or any other information
supplied in connection with the Programme or the Notes and, if given or made, such information or
representation must not be relied upon as having been authorised by the Issuer or any of the Dealers.
Neither this Base Prospectus nor any other information supplied in connection with the Programme or
any Notes (i) is intended to provide the basis of any credit or other evaluation or (ii) should be
considered as a recommendation by the Issuer or any of the Dealers that any recipient of this Base
Prospectus or any other information supplied in connection with the Programme or any Notes should
purchase any Notes. Each investor contemplating purchasing any Notes should make its own
independent investigation of the financial condition and affairs, and its own appraisal of the
creditworthiness, of the Issuer. Neither this Base Prospectus nor any other information supplied in
connection with the Programme or the issue of any Notes constitutes an offer or invitation by or on
behalf of the Issuer or any of the Dealers to any person to subscribe for or to purchase any Notes.
Neither the delivery of this Base Prospectus nor the offering, sale or delivery of any Notes shall in any
circumstances imply that the information contained herein concerning the Issuer is correct at any time
subsequent to the date hereof or that any other information supplied in connection with the Programme
is correct as of any time subsequent to the date indicated in the document containing the same. The
Dealers expressly do not undertake to review the financial condition or affairs of the Issuer during the
life of the Programme or to advise any investor in the Notes of any information coming to their
attention.
IMPORTANT ­ EEA RETAIL INVESTORS ­ The Notes are not intended to be offered, sold or
otherwise made available to and should not be offered, sold or otherwise made available to any retail


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investor in the European Economic Area. For these purposes, a retail investor means a person who is
one (or more) of: (i) a retail client as defined in point (11) of Article 4(1) of Dire ctive 2014/65/EU (as
amended, "MiFID II"); or (ii) a customer within the meaning of Directive 2002/92/EC (as amended or
superseded, the "Insurance Mediation Directive"), where that customer would not qualify as a
professional client as defined in point (10) of Article 4(1) of MiFID II; or (iii) not a qualified investor as
defined in Directive 2003/71/EC (as amended or superseded, the "Prospectus Directive"). Consequently
no key information document required by Regulation (EU) No 1286/2014 ( as amended, the "PRIIPs
Regulation") for offering or selling the Notes or otherwise making them available to retail investors in
the EEA has been prepared and therefore offering or selling the Notes or otherwise making them
available to any retail investor in the EEA may be unlawful under the PRIIPs Regulation.
MiFID II product governance / target market ­ The Final Terms in respect of any Notes will include a
legend entitled "MiFID II product governance" which will outline the target market assessment in
respect of the Notes and which channels for distribution of the Notes are appropriate. Any person
subsequently offering, selling or recommending the Notes (a "distributor") should take into
consideration the target market assessment; however, a distributor subject to MiFID II is responsible
for undertaking its own target market assessment in respect of the Notes (by either adopting or refining
the target market assessment) and determining appropriate distribution channels.
A determination will be made in relation to each iss ue about whether, for the purpose of the MiFID
Product Governance rules under EU Delegated Directive 2017/593 (the "MiFID Product Governance
Rules"), any Dealer subscribing for any Notes is a manufacturer in respect of such Notes, but otherwise
neither the Arranger nor the Dealers nor any of their respective affiliates will be a manufacturer for the
purpose of the MiFID Product Governance Rules.
The Notes have not been and will not be registered under the United States Securities Act of 1933, as
amended, (the "Securities Act") and are subject to U.S. tax law requirements. Subject to certain
exceptions, Notes may not be offered, sold or delivered within the United States or to, or for the account
or benefit of, U.S. persons (see "Subscription and Sale").
This Base Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any Notes
in any jurisdiction to any person to whom it is unlawful to make the offer or sol icitation in such
jurisdiction. The distribution of this Base Prospectus and the offer or sale of Notes may be restricted by
law in certain jurisdictions. The Issuer and the Dealers do not represent that this Base Prospectus may
be lawfully distributed, or that any Notes may be lawfully offered, in compliance with any applicable
registration or other requirements in any such jurisdiction, or pursuant to an exemption available
thereunder, or assume any responsibility for facilitating any such distribution or offering. In
particular, no action has been taken by the Issuer or the Dealers which is intended to permit a public
offering of any Notes or distribution of this Base Prospectus in any jurisdiction where action for that
purpose is required. Accordingly, no Notes may be offered or sold, directly or indirectly, and neither
this Base Prospectus nor any advertisement or other offering material may be distributed or published
in any jurisdiction, except under circumstances that will result in compliance wit h any applicable laws
and regulations. Persons into whose possession this Base Prospectus or any Notes may come must
inform themselves about, and observe, any such restrictions on the distribution of this Base Prospectus
and the offering and sale of Notes. In particular, there are restrictions on the distribution of this Base
Prospectus and the offer or sale of Notes in the United States, the European Economic Area (including
the United Kingdom, the Republic of Italy (Italy), Belgium and France) and Japan, see "Subscription
and Sale".
This Base Prospectus has been prepared on the basis that any offer of Notes in any Member State of the
European Economic Area which has implemented the Prospectus Directive (each, a "Relevant Member
State") will be made pursuant to an exemption under the Prospectus Directive, as implemented in that
Relevant Member State, from the requirement to publish a prospectus for offers of Notes. Accordingly
any person making or intending to make an offer in that Relevant Member State of Notes which are the
subject of an offering contemplated in this Base Prospectus as completed by Final Terms in relation to
the offer of those Notes may only do so in circumstances in which no obligation arises for the Issuer or
any Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a
prospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such offer.


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Neither the Issuer nor any Dealer have authorised, nor do they authorise, the making of any offer of
Notes in circumstances in which an obligation arises for the Issuer or any Dealer to publish or
supplement a prospectus for such offer.
The Notes may not be a suitable investment for all investors. Each potential investor in the Notes must
determine the suitability of that investment in light of its own circumstances. In particular, each
potential investor may wish to consider, either on its own or with the help of its financial and other
professional advisers, whether it:
(i)
has sufficient knowledge and experience to make a meaningful evaluation of the Notes, the
merits and risks of investing in the Notes and the information contained or incorporated by
reference in this Base Prospectus or any applicable supplement;
(ii)
has access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its
particular financial situation, an investment in the Notes and the impact the Notes will have on
its overall investment portfolio;
(iii)
has sufficient financial resources and liquidity to bear all of the risks of an investment in the
Notes, including Notes with principal or interest payable in one or more currencies, or where
the currency for principal or interest payments is different from the potential investor's
currency;
(iv)
understands thoroughly the terms of the Notes and is familiar with the behaviour of any
relevant indices and financial markets; and
(v)
is able to evaluate possible scenarios for economic, interest rate and other factors that may
affect its investment and its ability to bear the applicable risks.
Legal investment considerations may restrict certain investments. The investment activities of certain
investors are subject to legal investment laws and regulations, or review or regulation by certain
authorities. Each potential investor should consult its legal advisers to determine whether and to what
extent (1) Notes are legal investments for it, (2) Notes can be used as collateral for various types of
borrowing and (3) other restrictions apply to its purchase or pledge of any Notes. Financial institutions
should consult their legal advisers or the appropriate regulators to determine the appropriate treatment
of Notes under any applicable risk -based capital or similar rules.
All references in this document to euro and refer to the currency introduced at the start of the third
stage of European economic and monetary union pursuant to the Treaty on the functioning of the
European Union, as amended and all references to U.S. dollars, U.S.$ and $ refer to United States
dollars.
Any websites included in this Base Prospectus are for information purposes only and do not form part
of the Base Prospectus.


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TABLE OF CONTENTS
RISK FACTORS ........................................................................................................................... 2
OVERVIEW OF THE PROGRAMME ............................................................................................20
DOCUMENTS INCORPORATED BY REFERENCE........................................................................25
FORM OF THE NOTES ................................................................................................................27
APPLICABLE FINAL TERMS.......................................................................................................29
TERMS AND CONDITIONS OF THE NOTES ................................................................................47
USE OF PROCEEDS ....................................................................................................................80
DESCRIPTION OF THE ISSUER ...................................................................................................81
GLOSSARY OF TERMS AND LEGISLATION RELATING TO THE ISSUER ................................. 129
REGULATORY AND LEGISLATIVE FRAMEWORK ................................................................... 131
REGULATORY - TARIFFS OF INTERNATIONAL ACTIVITIES ................................................... 148
TAXATION ............................................................................................................................... 152
SUBSCRIPTION AND SALE ...................................................................................................... 160
GENERAL INFORMATION........................................................................................................ 164
ANNEX 1 - FURTHER INFORMATION RELATED TO INFLATION LINKED NOTES .................... 166

In connection with the issue of any Tranche of Notes, the Dealer or Dealers (if any) named as the
Stabilisation Manager(s) (or persons acting on behalf of any Stabilisation Manager(s)) in the applicable
Final Terms may over-allot Notes or effect transactions with a view to supporting the market price of
the Notes at a level higher than that which might otherwise prevail. However, stabilisation may not
necessarily occur. Any stabilisation action may begin on or after the date on which adequate public
disclosure of the terms of the offer of the relevant Tranche of Notes is made and, if begun, may cease at
any time, but it must end no later than the earlier of 30 days after the issue date of the relevant Tranche
of Notes and 60 days after the date of the allotment of the relevant Tranche of Notes. Any stabilisation
action or over-allotment must be conducted by the relevant Stabilisation Manager(s) (or persons acting
on behalf of any Stabilisation Manager(s)) in accordance with all applicable laws and rules.


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RISK FACTORS
In purchasing Notes, investors assume the risk that the Issuer may become insolvent or otherwise be unable to
make all payments due in respect of the Notes. There is a wide range of factors which individually or together
could result in the Issuer becoming unable to make all payments due in respect of the Notes. It is not possible
to identify all such factors or to determine which factors are most likely to occur, as the Issuer may not be
aware of all relevant factors and certain factors which it currently deems not to be material may become
material as a result of the occurrence of events outside the Issuer's control. The Issuer has identified in this
Base Prospectus a number of factors which could materially adversely affect its business and ability to make
payments due under the Notes. Most of these factors are contingencies which may or may not occur and the
Issuer is not in a position to express a view on the likelihood of any such contingency occurring.
In addition, factors which are material for the purpose of assessing the market risks associated with Notes
issued under the Programme are also described below.
Prospective investors should also read the detailed information set out elsewhere in this Base Prospectus and
reach their own views prior to making any investment decision.
FACTORS THAT MAY AFFECT THE ISSUER'S ABILITY TO FULFIL ITS OBLIGATIONS
UNDER NOTES ISSUED UNDER THE PROGRAMME
Regulatory and legislative risk
Regulatory and legislative risk for Snam is closely linked to the regulation of activities in the gas sector. The
relevant directives and laws enacted by the European Union and the Italian government and the resolutions of
the Energy Network and Environmental Regulation Authority ("ARERA") and, more generally, changes to
the regulatory framework may have a significant impact on the Issuer's operating activities, financial position
and economic outcomes. It is not possible to foresee the effect that future changes in legislative and fiscal
policies could have on Snam's business and on the industry sector in which it operates. Considering the
specific nature of its business and the context in which Snam operates, changes to the regulatory context with
regard to criteria for determining reference tariffs may have a significant impact on the Issuer's operations,
results, balance sheet and cash flow and, consequently, affect the Issuer's ability to meet its payments under
the Notes.
Macroeconomic and geo-political risk
Because of the specific nature of the business in which Snam operates, there are also risks associated with
political, social and economic instability in natural gas supplier countries, mainly related to the gas
transportation sector. A large part of the natural gas transported in the Italian national transport network is
imported from or passes through countries included in the MENA area (Middle East and North Africa, in
particular Algeria, Tunisia, Libya and, in TANAP-TAP perspective, Turkey together with States bordering the
Eastern Mediterranean) and in the former Soviet bloc (Russian Federation, Ukraine, and in the future,
Azerbaijan and Georgia), whose national situations are particularly sensitive politically, socially and
economically, crossed by currents of instability or which could constitute future crisis scenarios.
In particular, the importation and transit of natural gas from these countries are subject to a wide range of
risks, including: terrorism and common crime, alteration of the political-institutional balance; armed conflicts,
socio-economic and ethno-sectarian tensions; unrest and disturbances, high inflation; volatile exchange rates;
deficient legislation on insolvency and protection of creditors; limits on investment and on the import and
export of goods; increases in taxes and excise duties; forced imposition of contract renegotiations;
nationalisation or renationalisation of assets; changes in trade policies and monetary restrictions.
If a Shipper using the transportation service via Snam's networks cannot procure natural gas from the
aforementioned countries because of said adverse conditions, or in any way suffers from said adverse
conditions, or is consequently unable to fulfil its contractual obligations towards Snam, this could have
negative effects on the Snam Group's operations, results, balance sheet and cash flow, as well as in reference
to its participation in TAP, and, consequently, affect the Issuer's ability to meet its payments under the Notes.



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Commodity risk linked to changes in the price of gas
With reference to the risk connected with changes in the price of natural gas, pursuant to the regulatory
framework currently in force, changes in the price of natural gas to cover fuel gas and network leakages do
not represent a significant risk factor for Snam, since all gas for its core activities is provided by Shippers in
kind. However, in relation to transportation activities, the ARERA has defined, starting with the third
regulatory period (2010-2013), procedures for payment in kind, by users of the service to the leading
transportation company, of quantities of gas to cover unaccounted-for gas (UFG), due as a percentage of the
quantities respectively injected into and withdrawn from the transportation network based on defined measure
formulas. Specifically, the Authority, by means of Resolution 514/2013/R/gas, defined the permitted level of
the UFG given the average value registered over the last two years, and decided to keep this amount fixed for
the entire regulatory period in order to incentivise the main transmission system operator to deliver further
efficiency improvements. This criterion also was subsequently confirmed for the years 2018 and 2019 of the
transition period. For the relevant regulatory period, amounts of UFG higher than the permitted level would
not be compensated. In view of the aforementioned mechanism for the payment in kind of UFG, there is still
uncertainty about the quantities of UFG withdrawn over and above the quantities paid in kind by the users of
the service. Potential changes in the regulatory framework could have negative effects on the Snam Group's
operations, results, balance sheet and cash flow. Those items are being discussed as part of the consultation
process with ARERA.
Market risk
With reference to the risk connected with demand for gas, based on the tariff system currently applied by the
Authority to natural gas transportation activities, Snam's revenue, via the directly controlled transport
companies, is partly correlated to volumes transported. ARERA, however, introduced a guarantee mechanism
with respect to the share of revenues related to the volumes transported. This mechanism provides f or the
reconciliation of major or minor revenues, exceeding ± 4% of the reference revenues related to the volumes
transported. Under this mechanism, approximately 99.5% of total revenue from transportation activities is
guaranteed. Based on the tariff system currently applied by the Authority to natural gas storage activities,
Snam's revenue, via Stogit, correlates to infrastructure usage. However, the Authority has introduced a
mechanism to guarantee reference revenue that allows companies to cover a significant portion of revenues
recorded. For 2016 and 2017, the minimum guaranteed level of revenue recorded was approximately 97%.
With Resolution 589/2017/R/gas the ARERA confirmed this level for the remaining part of the regulatory
period. Such changes to the regulatory framework in force could have negative effects on the Snam Group's
operations, results, balance sheet and cash flow .
Abroad, protections from market risk are offered by French regulations and by long-term contracts of TAP,
IUK (which expired in September 2018) and Austria (differentiated expiries for TAG and GAS Connect
Austria starting from 2023); in Austria and the United Kingdom (with respect to Interconnector), after the
expiration of the long-term contracts, regulations do not guarantee coverage of volume risk.
Risk of climate change
Compliance with greenhouse gas regulations in the future may require Snam to adjust its facilities, and to
control or limit its emissions or undertake other actions that could increase the costs of complying with the
regulations in force, and therefore have negative effects on the Snam Group's operations, results, balance
sheet and cash flow.
The risks connected with the emissions market fall within the scope of the European Union directives on the
sale of permits relating to carbon dioxide emissions and the rules on controlling emissions of certain
atmospheric pollutants. With the start of the third period of the EU emissions trading system and of regulation
(2013 - 2020), the updating of the sector regulations has had as its main objective the authorisations for
emitting greenhouse gases and a constant reduction of the quotas on emissions released free of charge. The
allowances will be assigned to each plant on a gradually decreasing basis, and will no longer be constant, and
will also depend on the actual functionality of the plants. The ongoing further development of European
legislation could lead to identifying new ways of managing the necessary quotas, in particular through
possible reward mechanisms, to be agreed with ARERA, for the reduction of emissions from owned plants.
The Italian national committee for emissions trading allocates emission permits to the Issuer. In 2017, carbon
dioxide emissions from the Snam Group facilities covered by the European Union emissions trading system


3







were overall greater than the emission permits allocated. This deficit is offset by the allowances already
present in the registers for Snam Group plants, accumulated thanks to the surplus from previous years. Up to
2020, the emission allowances will gradually decrease, as a consequence it is probable that the carbon dioxide
emissions from the Issuer's facilities wil require the Issuer to obtain carbon credits from a third party to cover
any shortfall in its emission quota, thus bearing a potential market/volume risk. Those items are being
discussed as part of the consultation process with ARERA.
Climate change scenarios could lead to a change in population behaviour and could have an impact on natural
gas demand and transport volumes, just as they could affect the development of alternative uses of gas and the
promotion of new business.
Climate change could also increase the severity of extreme weather events (floods, droughts, extreme
temperature fluctuations) causing worsening of the natural and hydrogeological conditions of the territory
with a possible impact both on the quality and continuity of the service provided by Snam, and on the demand
for Italian and European gas. With reference to the effects of the change in the gas demand on the balance
sheet, income statement and financial position of the Snam Group, see the previous paragraph "Market risk".

Legal and non-compliance risk
Legal and non-compliance risk concerns the failure to comply, in full or in part, with European, national,
regional and local rules and regulations with which Snam must comply in relation to the activities it carries
out. The violation of such rules and regulations may result in criminal, civil and/or administrative sanctions, as
well as damage Snam's balance sheet, financial position and/or reputation. As regards specific cases, the
infringement of regulations on the protection of workers' health and safety and of the environment, and the
infringement of anti-corruption rules, inter alia, may also result in (possibly significant) sanctions on the
Issuer based on the administrative responsibility of entities (Legislative Decree231 of 8 June 2001).With
regard to the Risk of Fraud and Corruption, Snam believes it is of vital importance to ensure a c limate of
fairness and transparency in corporate operations and repudiates corruption in all its forms in the widest
context of its commitment to abiding by ethical principles. Snam's top management is strongly committed to
pursuing an anti-corruption policy, trying to identify possible areas of vulnerability and eliminating them,
strengthening its controls and constantly working to increase employees' awareness of how to identify and
prevent corruption in various business situations.
Reputational verification and acceptance and signature of the Integrity Ethical Pact are the pillars of the
system of controls aimed at preventing the risks associated with illegal behaviour and criminal infiltrations
concerning our suppliers and subcontractors, with the aim of ensuring transparent relations and professional
morality requirements in the whole chain of enterprises and for the whole duration of the relationship; in this
context in 2017, on the occasion of the "Snam 75 & Partners' Day" event, Snam dedicated a special space to
the issue of ethics and transparency as excellence and innovation in business activity.
Snam has been working since 2014 in partnership with Transparency International Italia and joined the
Business Integrity Forum (BIF) and, in 2016, became the first Italian company to join the "Global Corporate
Supporter Partnership".
During 2017, Snam started collaboration with the OECD being part, as the first Italian company in the private
sector, of the Business and Industry Advisory Committee (BIAC).
Snam has also collaborated with the Ministry of Foreign Affairs participating in the "VIII Italy-Latin America
and Caribbean Conference" and the "Italian Business Integrity Day" held at the Italian Embassy in
Washington.
During these events, the company illustrated the instruments implemented in terms of transparency and the
fight against corruption.
Ownership of storage concessions
The risk linked to maintenance of the ownership of the storage concessions is attributable by Snam to the
business in which the subsidiary Stogit operates on the basis of concessions issued by the Ministry of
Economic Development. Eight of ten concessions (Alfonsine, Brugherio, Cortemaggiore, Minerbio, Ripalta,
Sabbioncello, Sergnano and Settala) expired on 31 December 2016 and can be renewed no more than twice


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for a duration of ten years each time. With regard to these concessions, Stogit submitted ­ within the statutory
terms -­ the extension request to the Ministry of Economic Development and the proceedings are currently
pending before the Ministry. Pending said proceedings, Stogit's activities, as provided for by the reference
regulations, will continue until the completion of the authorisation procedures in progress envisaged by the
original authorisation, which will be extended automatically on expiry until said completion. One concession
(Fiume Treste) will expire in June 2022 and has already been renewed for the first ten-year extension period
in 2011, and another concession (Bordolano) will expire in November 2031 and can be extended for a further
ten years1. If Snam is unable to retain ownership of one or more of its concessions or if, at the time of the
renewal, the concessions are awarded under terms less favourable than the current ones, there may be negative
effects on the Issuer's operations, results, balance sheet and cash flow.
Malfunction and unexpected service interruption
Operating risks consist mainly of the malfunctioning and unforeseen interruption of the service determined by
accidental events, including accidents, breakdowns or malfunctions of equipment or control systems, reduced
output of plants, and extraordinary events such as explosions, fires, earthquakes, landslides or other similar
events outside of Snam's control. Such events could result in a reduction in Snam Group's revenue and could
also cause significant damage to people, with potential compensation obligations being incurred by Snam
Group. Although Snam has taken out specific insurance policies to cover some of these risks, the related
insurance cover could be insufficient to meet all the losses incurred, compensation obligations or cost
increases.
Delays in the progress of infrastructure implementation programs
There is also the concrete possibility that Snam could incur delays in the progress or termination of
infrastructure implementation programmes as a result of several unknowns linked to operating, economic,
regulatory, authorisation and competition factors, regardless of its intentions. Snam is therefore not able to
guarantee that the projects to upgrade and extend its network will be started, completed or lead to the expected
benefits in terms of tariffs. Additionally, the development projects may require greater investments or longer
timeframes than those original y planned, affecting Snam's financial position and results.
Investment projects may be stopped or delayed due to difficulties in obtaining environmental and/or
administrative authorisations or to opposition from political forces or other organisations, or may be
influenced by changes in the price of equipment, materials and workforce, by changes in the political or
regulatory framework during construction, or by the inability to obtain financing at an acceptable interest rate.
Such delays could have negative effects on the Snam Group's operations, results, balance sheet and cash flow.
In addition, changes in the prices of goods, equipment, materials and workforce could have a negative impact
on Snam's financial results.
Environmental risks
Snam and the sites in which it operates are subject to laws and regulations relating to pollution, environmental
protection, and the use and disposal of hazardous substances and waste. These laws and regulations expose
Snam to potential costs and liabilities related to the operation and its assets. The costs of possible
environmental remediation obligations are subject to uncertainty regarding the extent of contamination,
appropriate corrective actions and shared responsibility and are therefore difficult to estimate.
Furthermore, Snam is subject to regulatory and legislative risk related to the possible implementation of
increasingly more stringent regulations at European and national level in particular further to the new global
climate agreements (COP21 in Paris in 2015 and COP22 in Marrakech in 2017), aimed at encouraging the
transition towards a more sustainable economy that favours zero emission energy sources.
Snam cannot predict if and how environmental regulations and laws may over time become more binding and
cannot provide assurance that future costs to ensure compliance with environmental legislation will not
increase or that these costs can be recovered within the mechanisms tariffs or the applicable regulation.

1 Stogit's concessions issued before the entry into force of legislative decree no.1 64/2000 (i.e. all the concessions except for
Bordolano) can be extended by the Ministry of Economic Development no more than twice for a period of ten years each,
pursuant to art.1, paragraph 61 of Law no. 239/2004. P ursuant t o art. 34, paragraph 18, of the Decree Law n. 17 9/2012,
converted by Law 221/2012, the duration of the only Stogit license issued after the entry into force of legislative decree
no.164/2000 (Bordolano) is thirty years with the possibility of extension for a further ten years.


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Substantial increases in costs related to environmental compliance and other aspects related to it and the costs
of possible sanctions could negatively impact Snam's business, operating results and financial and
reputational position.
Employees and staff in key roles
Snam's ability to operate its business effectively depends on the skills and performance of its personnel. Loss
of "key" personnel or inability to attract, train or retain qualified personnel (in particular for technical
positions where the availability of appropriately qualified personnel may be limited), or situations in w hich
the ability to implement long-term business strategy is negatively influenced due to significant disputes with
employees, could have an adverse effect on Snam's business, financial conditions and operating results.
Risk linked to foreign holdings
The foreign companies owned by Snam may be subject to regulatory and/or legislative risk, under conditions
of social and economic political instability and to a market risk such as to adversely affect their activities,
economic results and the equity and financial situation. For Snam this may entail only a partial achievement of
the economic and financial objectives connected to the foreign investments and expected during the
acquisition phase.
Cybersecurity
Snam carries out its activities through a complex technological architecture relying on an integrated model of
processes and solutions capable of promoting the efficient management of the entire country's gas system. The
development of the business and recourse to innovative solutions capable of continuous improvement,
however, requires increasing attention to be focused on aspects of cybersecurity.
For this reason, Snam has developed its own cybersecurity strategy based on a framework defined in
accordance with standard principles on the subject and focusing on Italian and European regulatory
developments, especially as far as the world of critical infrastructures and essential services is concerned. First
and foremost, this strategy involves adapting one's own processes to the provisions of standards ISO/IEC
27001 (Information Security Management Systems) and ISO 22301 (Business Continuity Management
Systems) and the formal certification of conformity to the listed standards.
Alongside this and in accordance with technological developments, solutions aimed at protecting the Issuer
from cyber threats and malware are assessed and, where deemed appropriate, implemented. More specifically,
Snam has defined a model of cybersecurity incident management aimed at preventing and, when necessary,
ensuring timely remediation in the event of events that could damage the confidentiality and integrity of the
information processed and the IT systems used. At the base of the activity is a Security Incident Response
Team which, using technologies that allow collecting and correlating all the security events recorded on the
entire perimeter of the company's IT infrastructure, has the task of monitoring all the anomalous situations
from which negative impacts may result for the company and to activate, where necessary, escalation plans
suitable to guarantee the involvement of the various operating structures. Information-sharing with national
and European institutions and peers is used in order to improve the capacity and speed of response following
various possible negative events.
A great deal of attention is also paid to increasing awareness and specialist training of personnel, in order to
facilitate the identification of weak signals and raising consciousness about risks of a cyber nature that could
occur during the course of normal work activities.
A failure to prevent and/or guarantee prompt remediation against such events may have an adverse impact on
the Issuer's business, results of operations and financial condition and, as a result, its ability to meet its
obligations under the Notes.
Risks relating to dependence on authorisations in relation to the transport business
The gas transportation business of Snam Rete Gas and Infrastrutture Trasporto Gas is not carried out under a
concession regime; however, the construction and operation of new transportation infrastructures is dependent
on authorisations mainly granted pursuant to Articles 52-bis to 52-nonies of the Presidential Decree (DPR)
No. 327/2001 on energy infrastructures (See the section headed "Regulatory and Legislative Framework ­
Transportation and dispatching").


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