MADRID (Reuters) - A deal struck between Spanish gas firm Naturgy Energy Group NTGY.MC, Italy's Eni ENI.MI and the Egyptian government to resolve a series of disputes over a shuttered gas plant in northern Egypt has fallen through, Naturgy said on Thursday.
The agreement had been due to end Naturgy’s business interests in Egypt and dissolve a joint venture between Naturgy and Eni, while Eni and state-owned Egyptian firms would have increased their holdings in the Damietta plant.
Naturgy said in a bourse filing that the agreement was based on a series of conditions which had not been met, but that it was still open to seeking a friendly solution to the dispute.
The first condition of the agreement was that the plant would reopen, but it was impossible to do so because of restrictions on movement and industry worldwide to curb the spread of the novel coronavirus, a person familiar with the matter said.
“Eni is in touch with the counterparties and willing to set the frame of a possible new agreement,” a spokesman for Eni said.
In the meantime, Naturgy said it would go back to pursuing a legal claim to $2 billion in compensation its joint venture with ENI was awarded in the case by the World Bank’s International Centre for Settlement of Investment Disputes in 2018.
The facility has a capacity of 7.56 billion cubic metres per year but has been idle since the end of 2012, when a popular uprising hit gas supplies to Egypt.
Reporting by Isla Binnie; Additional reporting by Stephen Jewkes; Editing by Andrew Cawthorne and Lisa Shumaker
Our Standards: The Thomson Reuters Trust Principles.