IKAV, VTTI Buy Majority Stake in Italy's Biggest LNG Terminal
03.28.2024 By Tank Terminals - NEWS

March 28, 2024 [Reuters]-Dutch infrastructure group VTTI and German asset manager IKAV have teamed up to buy a majority stake in Italy’s biggest liquefied natural gas terminal, VTTI said on Wednesday.

 

Under the deal, ExxonMobil will sell its 70.7% stake in the Adriatic LNG terminal, the U.S. oil and gas group said, as part of a broader strategy to divest non strategic assets and focus efforts on doubling its LNG production by 2030 globally.

QatarEnergy is also divesting its 22% stake in the Italian infrastructure, according to three sources familiar with the matter. The group was not immediately available to comment.

Europe has increased LNG imports after Russia’s invasion of Ukraine in 2022 drastically curtailed gas coming through pipelines.

LNG terminals are needed to turn the liquefied fuel back into gas before pumping it into the network.

Italian gas grid operator Snam, which currently owns a 7.3% stake in the infrastructure, has 45 days to decide whether to exercise its right of first refusal to up its stake.

The state-controlled group could decide as soon as next week to increase its stake up to 30%, boosting its influence over an asset considered strategic for the country, two other sources told Reuters.

GOLDEN POWER

Increased flows of LNG globally have proven a boon for energy traders including Trafigura, Gunvor and Vitol, which is a shareholder of VTTI together with Australia’s IFM and Abu Dhabi’s ADNOC.

In a sign of the growing relevance of LNG for energy companies, sources told Reuters on Tuesday that energy trader Mercuria would hire prominent gas trader Steve Hill, formerly head of LNG at Shell

VTTI and IKAV did not disclose financial details of the deal on the Italian terminal, with sources saying the transaction may value Adriatic LNG at more than 800 million euros including debt.

The closing of the transaction for the terminal is expected in the second half of the year, VTTI said.

The Italian government will review the transaction under “golden power” rules for industries deemed of strategic importance such as banking, energy, telecoms and health.

The Adriatic LNG terminal is located about 9 miles (15 km) off the Veneto coastline and has a regasification capacity of 9 billion cubic metres of natural gas per year.

Rothschild advised the two sellers in the transaction, with Mizuho Securities acting as financial adviser for IKAV and Natixis Partners Iberia supporting the consortium.

Natixis and Intesa Sanpaolo acted as underwriters for the acquisition financing facility. Herbert Smith Freehills was legal adviser to the consortium.

 

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