Eni to sell Trans-Austria Gas pipeline to Cassa Depositi e Prestiti for $675 million

Italian gas and oil company Eni SpA yesterday said it is selling its 89-per cent stake in the Trans-Austria Gas pipeline TAG, to Italian state lender Cassa Depositi e Prestiti SpA, in a deal worth €675 million ($986 million), in order to settle a dispute with the European antitrust regulators.

The natural gas pipeline comes from the Slovak-Austrian border in the south, near the border with Italy, transporting natural gas from Russia to Italy and Austria.  It is managed by Trans Austria Gasleitung GmbH, a partnership between Eni and Austria's OMV AG, which owns the remaining stake in the pipeline.

The sale includes a payment of €483 million and reimbursement of a shareholder loan of €192 million granted by Eni to the company

The TAG gas pipeline, which is 89-per cent owned by Eni and 11-per cent by Austria's OMV AG, transports Russian gas from the Slovak border via Germany and Austria into Italy and is considered strategic by the Italian government.

The Brussels-based European Antitrust Commission (EC) had agreed to drop antitrust charges against Eni after it agreed to sell some pipelines.

In order to boost competition in Italy's gas market, EC said in 2009 that Eni may have abused its dominant position by limiting its investment in the gas pipeline network. EC dropped charges in 2010 against Eni after it agreed to sell its Transitgas, TENP and its TAG pipeline.

The sale will not only open up Italy's natural gas market, but also lower the price of gas to customers.

"This operation is part of the commitments taken by Eni in response to the European Antitrust Commission ruling on September 29, 2010, and it is subject to its approval," the Italian company said in a statement.