Enagás boosts hydrogen investment plans, sells stake in Tallgrass Energy

As a further boost to its hydrogen investment plans, Spanish transmission system operator (TSO) Enagás has reached an agreement to sell its 30.2% shareholding in the U.S. company Tallgrass Energy to Blackstone Infrastructure Partners for $1,100 million (€1,018 million).

Archive; Courtesy of Enagás

The transaction is expected to be closed at the end of July 2024, although out of the agreed amount, $50 million will be received once an ongoing administrative authorization is obtained.

According to Enagás, the sale is a part of the asset rotation process announced by the company in its 2022-2030 Strategic Plan, which has decarbonization and security of supply in Spain and Europe as its priorities.

The company claimed that the transaction at closing will generate an accounting loss in the 2024 income statement of around €360 million and will have a “very positive” impact on the company’s Cash Flow Statement due to the cash-in that this disinvestment involves.

“With the rotation of the stake in Tallgrass Energy, Enagás strengthens its balance sheet to undertake with guarantees the execution of the investment plan in renewable hydrogen infrastructure, included in the European Union’s list of Projects of Common Interest and complying with the mandate of the Royal Decree-law 8/2023 that designates Enagás as provisional manager of the Hydrogen Backbone Network,” Enagás stated.

This transaction is also said to reinforce the company’s dividend policy, as well as its long-term sustainability.

To note, as part of the asset rotation process announced by the company in its Strategic Plan, Enagás has carried out other sales transactions such as its participation in the GNL Quintero terminal in Chile, as well as the Morelos gas pipeline and the Soto La Marina Compression Station, both in Mexico.

The company has also carried out purchase operations in Spain and Europe such as the acquisition of an additional 4% in the Trans Adriatic Pipeline (TAP), reaching 20% ​​of the shareholding, and the entry into the Hanseatic Energy Hub (HEH) consortium with a 15% stake for the construction of the first land terminal for liquefied natural gas (LNG) in Germany.