Fluxys and Snam to buy out CDPQ’s stake in Interconnector UK pipeline
Oil and gas industry news : Fluxys and Snam will buy out the 33.5% stake of Canadian pension fund Caisse de depot et placement du Quebec (CDPQ) in the Interconnector UK pipeline in the southern North Sea for about $103 million.
Through the transaction, the Belgian natural gas transmission system operator Fluxys and the Italian natural gas infrastructure company Snam will become the sole shareholders in the bi-directional offshore gas pipeline that links the UK and continental Europe through Belgium.
Fluxys and Snam, through their joint ventures Gasbridge 1 and Gasbridge 2, are exercising their proportional pre-emption right on the CDPQ stake in the 235km long Interconnector UK pipeline.
The transaction will allow CDPQ to converge the management of its stake in the offshore gas pipeline into its 20% ownership in Fluxys.
After the completion of the transaction, Fluxys will own 76.32% and Snam will own the remaining 23.68% stake in the Interconnector UK pipeline, thereby confirming their commitment to advance the offshore gas pipeline project towards its next stage of development.
Fluxys and Snam, in a joint statement, said: “As the initial long-term capacity contracts for the Interconnector pipeline are set to expire in October 2018, the company is preparing for a new market environment in which short-term contracting and commercial flexibility take center stage.”
The Interconnector UK pipeline, which had been operating since 1998, has been laid out in the southern North Sea between Bacton terminal in the UK and Zeebrugge terminal in Belgium with an investment of £460 million.