Fluxys G Buys Stakes in Transitgas and TENP Gas Pipelines from Eni

Yesterday Fluxys G signed an agreement to acquire Eni’s interests in the TENP (Germany) and Transitgas (Switzerland) pipelines for a purchase price of approximately €860 million.

The transaction comprises Eni’s stakes in asset owners TENP KG (49%) and Transitgas AG (46%) as well as Eni’s interests as Transmission System Operator in both assets, including the rights to commercialize as independent Transmission System Operator 60% of capacity in the TENP pipeline and 90% of capacity in the Transitgas pipeline. For avoidance of doubt, Fluxys G is the parent company of Fluxys, the Belgian Transmission System Operator listed on Euronext Brussels.

Walter Peeraer, Chief Executive Officer of Fluxys G: “The acquisition fully fits in with our strategy to facilitate and promote cross-border flows, to strengthen security of supply and to enhance liquidity in the North-Western European natural gas market. Through our industrial involvement as Transmission System Operator in the TENP and Transitgas pipelines we will enable the Fluxys group to create and facilitate direct links between several markets including Zeebrugge, the German market and South & Eastern Europe. Currently our assets provide capacity to flow gas between Eastern Europe and the UK and from Zeebrugge to France and Southern Europe. Now we will be able to flow gas between the North and the South of Europe. We will continue to invest in the TENP and Transitgas pipelines and they will become all the more important once both systems can operate in two directions and develop into an essential link to further tie together the gas trading places in Europe.”

Target to close takeover by the end of December at the latest
Eni and Fluxys G are ready to close the transaction as soon as Fluxys G has been qualified suitable buyer under European competition law and envisage the end of December at the latest as target date.

TENP and Transitgas in a nutshell
The TENP/Transitgas link plays a key role in the supply of Norwegian gas to the German, Swiss and Italian markets.

• The TENP infrastructure comprises two parallel pipelines of approximately 500 kilometres running from the Bocholtz interconnection point with the Netherlands, along the Western border of Germany to the Wallbach interconnection point with the Transitgas pipeline in Switzerland. A branch from Stolberg to the Raeren/Eynatten interconnection point ties the TENP pipeline into the Belgian network of TSO Fluxys.
• The Transitgas infrastructure is not only tied in to the TENP pipeline but also connected to the French network at the Oltingue interconnection point. The approximately 300 kilometre pipeline crosses central Switzerland and connects with the Italian network at Griespass.

Enhancing security of supply
The TENP and Transitgas pipelines make gas flow from the North to the South of Europe and a project is underway to make the infrastructure bi-directional so as to enable South to North movements. With a view to enhancing security of supply and interconnecting trading places Fluxys G fully backs the future investments to make both systems bi-directional and is also committed to reinforce the Stolberg-Raeren/Eynatten link to provide more capacity between the TENP pipeline and the Belgian network.

Fluxys G capital increase
Fluxys G shareholders Publigas and Caisse de dépôt et placement du Québec will proceed to a capital increase of €300 million to support the group’s investment projects, among which the industrial acquisition agreed on Thursday. Publigas and the Caisse will additionally invest €90 million and €210 million respectively, with the Caisse increasing its stake in Fluxys G from 10 to 20%.

New external debt financing
Fluxys G will fund the acquisition partly through own means, partly through new external debt financing. For this important step in the implementation of its North-Western European strategy, Fluxys G was able to capitalize on the support of a consortium of 7 major international banks: a 10-year amortized loan was put in place with Banca IMI, BayernLB, BNP Paribas Fortis, Crédit Agricole Corporate and Investment Bank, ING, UBS and UniCredit.

The loan secured from the bank consortium amounts to CHF 1.043 billion, the larger part of which is to cover the re-financing of Transitgas debt and the latter’s capital expenditure programme for the following 5 years, while the remainder of the loan is to cover part of the purchase price.

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Source: Fluxys G, September 23, 2011;