European transmission companies Enagás and Fluxys have agreed to sell their stakes in Swedish gas grid operator Swedegas to FS Gas Transport for a combined amount of SEK2.048bn (€192m).
Image: First State Investments to acquire Swedegas from Enagás and Fluxys. Photo: courtesy of supakitmod/FreeDigitalPhotos.net.
FS Gas Transport is an indirectly 100% owned subsidiary of First State Investments managed European Diversified Infrastructure Fund II (First State).
On the other hand, Swedegas is the owner of the entire high-pressure gas pipeline network in Sweden and is also the operator of the Swedish Gas System. With a 600km pipeline network, the gas grid operator provides gas to 33 municipalities, various combined heat and power plants and industrial customers.
Enagás, in a statement, said: “The sale of Swedegas would represent a return exceeding 10% for Enagás in terms of IRR after tax. This return is not subject to the evolution of the exchange rate, since Enagás financed 100% of the investment in local currency.”
The Spanish transmission company further said that the sale of Swedegas aligns within the strategy announced by it, which considers the possibility of rotation of certain assets outside Spain, in order to pursue potential new investments.
The pair of Enagás and Fluxys had acquired 50% stake each Swedegas in 2015 from EQT Infrastructure.
According to Fluxys, Swedegas in the last three years has developed Sweden into a major growth market for small-scale liquefied natural gas (LNG) in both shipping and industry.
For First State, the acquisition of Swedegas is the fund’s second in the Swedish gas network sector following the purchase of Sweden’s largest gas distribution system operator in April 2018.
First State infrastructure investments partner Marcus Ayre said: “We have significant experience in the European energy transmission and distribution market and it was natural for us to look for further investments in the Swedish gas network sector.
“The energy market is one which meets our investment criteria as we seek to create long-term, sustainable value for our investors.”
The completion of the sale will be subject to approval from the Swedish Competition Authority.