Naturgy, Eni Reach Agreement With Egypt Government in LNG Dispute -- Update
February 27 2020 - 11:27AM
Dow Jones News
--The deal signals the restart of the Damietta liquefaction
plant, which has been at the center of the disputes between Union
Fenosa Gas and the Egyptian government
--UFG's participation in the Damietta plant will be transferred
to Eni and state-owned Egyptian Natural Gas Holding Company
--Eni will take over the contract for the purchase of natural
gas for the plant and receive corresponding liquefaction rights
By Giulia Petroni
Naturgy Energy Group SA and Eni SpA have agreed the terms to
"amicably" resolve the disputes concerning Union Fenosa Gas SA with
the Egyptian government, the companies said Thursday.
The agreement values UFG--a 50/50 joint venture between Naturgy
and Eni--at a total consideration of $1.5 billion, said Naturgy. Of
this amount, $1.2 billion is related to Egyptian assets and $300
million to assets outside the country.
As part of the agreement, Naturgy said it would receive a cash
payment of $600 million, along with most of the assets outside of
Egypt--excluding activities in Spain--and end its joint venture
with Eni. The Italian oil major will take over commercial
activities of natural gas in Spain.
"The completion of the transaction will result in Naturgy's
departure from Egypt and the end of its joint-venture with Eni,
having no obligation in the future to buy liquefied natural gas
from the country," Naturgy said.
The deal paves the way for the restart of the Damietta
liquefaction plant--which is expected by June 2020--after it was
closed in 2012, Eni says.
UFG's 80% participation in the Damietta plant will be
transferred to Eni and state-owned Egyptian Natural Gas Holding
Company, which will get a 50% and 30% respectively, according to
the Italian company.
Eni also said it would take over the contract for the purchase
of natural gas for the plant and receive corresponding liquefaction
rights.
The parties are expected to execute the transaction in the first
half of the year, Naturgy says.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
February 27, 2020 11:12 ET (16:12 GMT)
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