Snam, the largest European natural gas infrastructure group, agreed to buy for 385 million euros 49.9% of Eni’s stakes in the gas facilities running from the border of Algeria to Italy. These include the onshore pipeline across Tunisia (TTPC) and the offshore pipeline connecting Cap Bon in Tunisia to Mazara del Vallo, Sicily (TMPC).
Under the agreement, Eni will transfer its entire ownership in the infrastructures into a newly founded company (NewCo), controlled jointly by Eni (50.1% of the shares) and Snam (49.9% of the shares). All capacity rights will be transferred into NewCo, together with the infrastructure.
The agreement also provides for an earn-in/earn-out mechanism to be calculated on the basis of the revenues that will be generated by pipeline companies (about 90 million euros net income in 2020). More information on the deal can be found here https://www.snam.it/en/Media/Press-releases/2021/Eni_Snam_pipelines_Algeria_Italy.html
From Snam’s perspective, the North African route is key to Italian natural gas security of supply. Further, through this deal Snam intends to pursue its strategy as enabler of the transition to green hydrogen in Europe – with North Africa becoming a key producer of green hydrogen in the future.
As the partners are related parties under Article 3 of the regulation adopted by Consob, the transaction required a “reasoned favourable opinion” by Snam’s Risk Control and Related Party Transactions Committee. DFC, in partnership with Frontier Economics, supported this opinion with analysis on the perspectives regarding the evolution of natural gas imports into Italy, as well as perspectives and risks associated with imports of green hydrogen from North Africa.View all Cases