Swedish TSO Sale Agreed

Two national transmission system operators (TSOs) have agreed to sell their Swedish joint venture little more than three years after its acquisition.

Spain's Enagas and Belgium's Fluxys said September 3 they have reached an agreement to sell their 50% shares in Swedegas – Sweden's sole high-pressure gas TSO – to FS Gas Transport.

The latter is an indirectly wholly-owned subsidiary of European Diversified Infrastructure Fund II (EDIF II) which is managed by First State Investments, an Australia-based infrastructure fund.

Enagas and Fluxys will each receive krona 1,024mn (€96mn or $111mn). The transaction – worth in total almost krona 2.05bn (€192mn) – is subject to approval from the Swedish competition authority.

EDIF II earlier this year acquired Sweden's largest gas distributor in April 2018 when it bought the E.ON Gas Sverige gas grid from German utility E.ON.

Enagas said the divestment will represent a post-tax return of over 10% and fits in with its strategy of rotating some assets outside Spain in order to undertake potential new investments. It also said that Enagas and Fluxys were approached by First State with a purchase offer that they accepted. First State is linked to Australian fund Colonial First State, controlled by Commonwealth Bank of Australia.

Swedegas owns 600 km of high-pressure gas pipelines and is Sweden's sole TSO, operating the Swedish Gas System; it is also developing an LNG bunkering facility in the Port of Gothenburg.

Marcus Ayre, partner, Infrastructure Investments at First State, 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.”