(Adds Gas Natural, details)
By Jose Elías Rodríguez
MADRID, July 7 Spanish gas grid operator Enagas
and utility Gas Natural said on Monday gas
sector reform announced by the government would initially hit
revenues but have a limited effect on profits in the medium
The regulations were announced on Friday and aim to address
a tariff deficit in the gas sector created by years of
mismatched regulated costs and revenues which has pushed up
energy bills for consumers.
Enagas said it expected the reform to lower its revenue by
an average of around 120 million euros ($163.7 million) per year
through until 2020.
Enagas is working on a cost-cutting, efficiency plan for the
next six years, to be announced in the fourth quarter, to offset
the impact of the reform, Enagas said in a statement to the
The revenue hit would be offset at the profit level by
spending cuts, lower redemptions and income from outside of
Spain, it said.
Gas Natural said the reform would have a 45-million-euro hit
on revenues this year, though said the changes would not have a
significant impact on expansion plans announced in its 2013-2015
Bank Espirito Santo said the reform was positive for
investors in Enagas and Gas Natural.
"The cuts come broadly in line with our expectations and the
average of the market but is below what has been suggested in
the press in the last few weeks," Espirito Santo said in an
investor note on Monday.
The regulation will help reduce a gas tariff deficit that
was otherwise expected to reach about 800 million euros this
"The new regulatory framework gives stability and
predictability to the system," Enagas said.
At 0847 GMT, Enagas shares were up 3.6 percent while Gas
Natural was up 0.9 percent, both outperforming the blue-chip
($1 = 0.7331 Euros)
(Additional reporting by Paul Day; editing by Sarah Morris and