Czech Republic’s state-owned electric power transmission system operator ČEPS has agreed to acquire RWE Gas Storage, a subsidiary of German energy company RWE, for a total consideration of €360m.

The Czech Republic’s government has approved the proposed transaction.

RWE Gas Storage is a large-scale operator of gas storage facilities in the Czech Republic with six underground gas storage facilities with more than 2.7 billion m3 total operating volume.

Under the terms of the agreement, ČEPS will acquire RWE Gas Storage’s entire workforce, which comprises 250 employees.

The transaction is expected to be closed in 2023, subject to regulatory approval.

ČEPS intends to finance the purchase, using the surplus of its own resources in the short term, and use proceeds from cross-border capacity auctions.

Czech Republic’s Industry and Trade Minister Josef Síkela said: “ČEPS is the sole national transmission system operator, responsible for the transmission of electricity and the proper operation of the electricity system, and thus also for the safety and reliability of electricity supply in the Czech Republic.

“The company is wholly owned by the state, with 100% of the ownership rights exercised through the Ministry of Industry and Trade.

“The purchase of the gas storage facilities by ČEPS is therefore a logical step in government activities to further strengthen the Czech Republic’s security of supply.”

RWE has decided to divest its Czech business, as gas storage activities are no longer a part of its core business while retaining its gas storage business in Germany.

Its storage facilities in Germany are salt caverns, which are ready to be used for storing hydrogen, building on their geological characteristics, said the German company.

RWE CEO Markus Krebber said: “We are delighted to have found a competent and experienced buyer in ČEPS, for whom our Czech gas storage business is of key strategic significance.

“This provides certainty for the workforce and the opportunity to continue to evolve both the company and its business. RWE Gas Storage CZ is a profitable and established company that plays an important role in the security of supply in the Czech Republic.”