Eni has agreed to sell 49.9% of its combined stake in companies operating onshore gas pipelines running from Tunisia’s border with Algeria to the Tunisian coast (TTPC) and offshore gas pipelines traversing the Mediterranean Sea from Tunisia to Italy (TMPC) to Italian energy infrastructure operator Snam.
Snam is paying 385 million euros ($436 million) for the stake. The company operates in Albania (AGSCo), Austria (TAG, GCA), France (Terega), Greece (DESFA), Italy, the UAE (ADNOC Gas Pipelines), and has interests in the UK Interconnector and the Trans Adriatic Pipeline (TAP).
Snam also recently entered markets in China and India, according to the company’s website.
Under the agreement announced on 27 November, Eni will transfer its ownership stakes in TTPC and TMPC to NewCo, a newly incorporated Italian company in which Eni will hold a 50.1% controlling interest; Snam will self-finance its purchase of 49.1%.
Eni CEO Claudio Descalzi said in a company press release that Eni’s sale of a non-controlling stake in the two pipeline systems will “free up new resources” to invest in energy transition initiatives while Eni, together with Snam, continues to manage the “strategic infrastructure” that ensures “the security of natural gas supply” to Italy.
“Gas will play a key role in the transition of energy systems to zero-emission models, and it is important to maintain the availability and diversification of supply routes for this resource,” Descalzi said.
Snam CEO Marco Alverà highlighted that the transaction enables Snam to “bridge its infrastructure towardsNorth Africa,” which promises to become “a hub for producing solar energy and green hydrogen.”
The agreement includes an earn-in and earn-out mechanism to be calculated based on revenues generated by the “target companies” (companies whose current activities related to the pipelines will be taken over by NewCo). In 2020, the target companies generated a net income (100% of Eni’s stake) of around 90 million euros, according to Eni.
Eni and Snam will control NewCo jointly according to equal governance principles and will consolidate shares in the newly incorporated company based on equity, the news release said.
The parties expect to close on the transaction in Q3 2022 subject to antitrust and other regulatory approvals, including authorization by the Tunisian government and approval by shareholders and boards of directors of companies whose interests will be folded into the NewCo corporate structure.
Eni noted in its press release that because of anticipated delays in closing the transaction, “a ticking fee will accrue on the consideration from the date of the balance sheet of reference (30 June 2021), to be paid by Snam to Eni upon the closing of the transaction.”
