Fluxys to Buy Stake in Medgaz

Fluxys SA, the Belgiun-based energy company, says it has reached a €230 million agreement with Spanish companies Endesa and Iberdrola for stakes in Medgaz, owner and operator of the subsea pipeline which brings gas from Algeria into Spain.

In a press statement, Fluxys said it expects to close both transactions in the first half of 2013.  The transaction requires the other shareholders in Medgaz (Sonatrach, Cepsa and GDF SUEZ) not to execute their preferential acquisition rights and the consent of the European Investment Bank, which has granted a loan for building the pipeline.

The deal will make Fluxys a 32% partner in Medgaz for an acquisition price of approximately €233 million. Fluxys’ financial strength is to remain unaffected by the transaction as by the end of 2012 the company will have carried through a capital increase of over €140 million. The capital increase allows Fluxys to maintain a solid equity/debt ratio while continuing its development in Europe.

The Medgaz pipeline was commissioned in April 2011 and can carry 8 billion cubic metres of gas per year. The pipeline is a strategically important link for bringing Algerian gas to Europe.