29 March 2016 Analysis and trends of the gas market in Italy (2015) Demand for Natural Gas in Italy and Market Environment In 2015, Italian demand for natural gas grew by 9.1% compared with the previous year to a total of about 66.9 billion cubic meters, for an overall increase of about 5.6 billion cubic meters. This improvement is chiefly the result of an upturn in demand from residential customers (+2.9 billion cubic meters; +11.6%), which was particularly low in 2014 due to unusually mild weather during the winter months. Gas consumption by thermoelectric power plants was also up (+2.9 billion cubic meters; +16.6% compared with 2014) due mainly to high demand for electric power in the summer months and a hydroelectric output that was slightly below average. Demand from industrial users (-0.5 billion cubic meters; -3% compared with 2014) was down slightly. As for supply sources, the following developments characterized 2015: • lower domestic production (-0.4 billion cubic meters; -6% compared with 2014); • higher gas imports (+5.4 billion cubic meters; +10% compared with 2014); • a net balance of about 0.3 billion cubic meters in the volumes added to the stored gas inventory. In 2015, consistent with the trends described above for the main energy commodities, the price for indexed gas (shown in the chart that follows, which uses the Gas Release 2 formula as a benchmark) decreased by 20% compared with 2014 averaging 321.6 EUR/000 cubic meters. In the first quarter of the year, prices increased compared with 2014 levels, due to the weakness of the euro versus the U.S. dollar and the time lag with which a decline in the price of Brent crude and derivative products is reflected in the formula. However, in the remaining nine months, despite the upward bias caused by the weakness of the euro, a strong downward trend prevailed.