November 26, 2012 / 10:55 AM / 5 years ago

Spain's Endesa puts Medgaz stake on sale: source

MADRID (Reuters) - Spain’s Endesa (ELE.MC) has hired Banco Santander (SAN.MC) to sell its 12 percent stake in the Medgaz pipeline between Algeria and Spain, a source with knowledge of the matter said, in a move to diversify its energy portfolio.

“Endesa’s gas supply needs are covered through Qatar and Nigeria, and it doesn’t need that much gas in Spain, where its combined cycle power plants are at a virtual standstill,” the source said on Monday.

Endesa, which is 92 percent-owned by Italy’s Enel (ENEI.MI), is a leading retailer of gas in Spain.

The 12 percent stake in Medgaz would be worth about 168 million euros ($218 million), according to recent valuations of the Spanish-Algerian pipeline.

Endesa and Santander declined to comment.

Algeria’s state-owned Sonatrach controls 36 percent of Medgaz, whose other shareholders include Iberdrola (IBE.MC) and oil firm Cepsa with 20 percent each and France’s Gaz de France GSZ.PA with 12 percent.

Earlier, Spanish financial website El Confidencial said Iberdrola was also looking to sell its 20 percent stake in Medgaz as part of plans to divest assets and cut debt.

    Iberdrola declined to comment.

    Meanwhile, Spanish power firm Gas Natural (GAS.MC) has been eyeing a stake in Medgaz and last year signed an agreement with Sonatrach to buy a 10 percent stake in the pipeline.

    ($1 = 0.7717 euros)

    Reporting by Jose Elias Rodriguez; Writing by Tracy Rucinski; Editing by Hans-Juergen Peters

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