Naturgy, ENI and the Arab Republic of Egypt have reached a new agreement to amicably resolve the disputes affecting Unión Fenosa Gas (UFG), a 50:50 joint venture between Naturgy and ENI.
The parties have signed an agreement whereby Naturgy will receive a series of cash payments adding up to approximately US$0.6 billion, as well as most of the assets outside of Egypt, excluding UFG’s commercial activities in Spain.
The new agreement, approved by the Egyptian Council of ministers, is aligned with the former agreement reached in February 2020 (terminated in April due to certain conditions precedent not being met) and values UFG (100%) at a total consideration of up to US$1.5 billion, depending on the energy scenario, of which US$1.2 billion relate to its Egyptian assets (including the outstanding legal proceedings), and the remaining US$0.3 billion for the assets outside of Egypt.
The agreement has been following the ratification of their Council of Ministers last 25 November.
The President of Naturgy, Francisco Reynés, stated “this agreement is very positive. It represents a clear progress in simplifying and reducing the company’s exposure to gas, releasing Naturgy from its 3.5 billion m3 annual gas procurement contract to supply its CCGT’s in Spain which was due to end 2029, and it resolves a complex situation lingering since 2012 and which couldn’t be resolved in the Spring because of the pandemic.”
The completion of the transaction, planned during the first months of 2021 once customary conditions precedent are met, including the restart of operations in Damietta planned in the first quarter of 2021, will result in Naturgy’s departure from Egypt and the end of its joint-venture with ENI.
Read the article online at: https://www.lngindustry.com/liquid-natural-gas/02122020/naturgy-and-eni-resolve-disputes-and-allow-damietta-lng-to-restart/