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UPDATE 1-Fluxys in bid for Eni's gas pipelines-sources
February 2, 2011 / 3:07 PM / 7 years ago

UPDATE 1-Fluxys in bid for Eni's gas pipelines-sources

* Fluxys teams up with Allianz Capital Partners-sources

* RREEF, Terra Firma, Sintonia also bidding-sources

* Pipelines valued together at up to 1.5 bln eur-sources

(Adds detail, background)

By Greg Roumeliotis and Quentin Webb

AMSTERDAM/LONDON, Feb 2 (Reuters) - Belgium’s Fluxys DIST.BR aims to expand its gas pipeline network into southern Europe by bidding for Eni’s (ENI.MI) assets that have also attracted interest from financial investors, financial sources said.

Fluxys, which aspires to be a major European gas transmission infrastructure company, taking on Dutch-based Gasunie, submitted an indicative offer for the assets this week in a consortium with Allianz Capital Partners, the sources said on Wednesday.

It faces competition from infrastructure funds and private equity firms lured by the stable long-term cash flows of Eni’s gas pipelines. RREEF Infrastructure, Terra Firma and Sintonia, an investment vehicle of the Benetton family backed by Goldman Sachs (GS.N), have also made offers, sources close to them said.

Spokespeople for Eni, Fluxys, Allianz, RREEF and Terra Firma declined to comment. Sintonia was not immediately reachable for comment.

Eni said in December it had kicked off the sale of its stakes in the TENP and Transitgas pipelines after the European Commission agreed to drop antitrust charges against the Italian oil and gas group. [ID:nLDE70R0XF]

Estimates of the value of the pipelines vary due to the inclusion of Eni’s related shipping companies in the sale. Market sources say TENP as a whole could have a value of up to 500 million euros ($692.1 million) and Transitgas of up to 1 billion.

Eni holds a 49 percent stake in TENP, which runs from the German-Dutch border to the German-Swiss border, while E.ON (EONGn.DE) owns the rest. TENP connects with Transitgas, in which Eni holds a 46 percent stake and the majority is owned by Swissgas AG, linking up with the network of Italy’s Snam Rete Gas (SRG.MI).

REVERSE FLOW

The TENP network not only supplies Dutch gas to Switzerland and Italy but also includes a pipeline running from Germany’s western border to Belgium, where it connects with the grid of Fluxys.

A spokesman for Gasunie, which feeds gas to TENP, declined to comment on the possibility of rival Fluxys acquiring Eni’s participation.

Plans are being explored to offer Transitgas and TENP reverse flow capabilities that would allow them to transport gas out of Italy, allowing Europe to diversify its gas supplies. [ID:nLDE6A816M]

The next stage in Eni’s auction of its stakes in the two operations is to shortlist bidders and seek final offers, the sources said.

As part of its settlement with the EU, Eni has already agreed to sell its 89 percent stake in TAG, an Austrian pipeline carrying Russian gas into Italy, to a company controlled by the Italian state.

Eni is the latest in a line of energy companies such as Germany’s E.ON and RWE (RWEG.DE) and France’s GDF Suez GSZ.PA and EDF (EDF.PA) to have settled with the EU executive on charges of abusing a dominant market position.

When the EU forced RWE to sell its German gas network Thyssengas GmbH, Fluxys looked at acquiring the grid after Gasunie dropped its plans to bid, but in December 2010 the asset fell in the hands of a Macquarie (MQG.AX) infrastructure fund. [ID:nLDE6B21TY]

Fluxys teaming up with Allianz is the latest sign of the pipeline operator trying to attract infrastructure investors. Last week Fluxys said it would carry out a 150 million euros capital increase to allow Canadian pension fund manager Caisse de depot et placement du Quebec to take a 10 percent stake. (Additional reporting by Simon Meads in London and Stephen Jewkes in Milan; Editing by Elaine Hardcastle and David Holmes) ($1=.7224 Euro)

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