Fluxys SA said that it has reached an agreement with Endesa and Iberdrola for Fluxys to acquire their stakes in Medgaz, owner and operator of the subsea pipeline flowing gas from Algeria into Spain.
Fluxys expects to close both transactions in the first half of 2013. Prior to closing, the transaction requires the other shareholders in Medgaz (Sonatrach, Cepsa and GDF SUEZ) not to execute their preferential acquisition rights and the consent of the European Investment Bank, which has granted a loan for building the pipeline.
Upon closing Fluxys will have become a 32% partner in Medgaz for an acquisition price of approximately €233 million, taking into account the usual adjustments in transactions of this nature. Fluxys’ financial strength is to remain unaffected by the transaction as by the end of 2012 the company will have carried through a capital increase of over €140 million. The capital increase allows Fluxys to maintain a solid equity/debt ratio while continuing its development in Europe.
The Medgaz pipeline has been commissioned in April 2011 and can carry 8 billion cubic metres of gas per year. The pipeline is a strategically important link for bringing Algerian gas to Europe and it will further gain significance once the interconnection between the Spanish and French markets has become stronger.
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LNG World News Staff, December 30, 2012; Image: Fluxys