Naturgy strengthens its strategic profile with the extension of the Medgaz gas pipeline
Naturgy reinforces its strategic character as a leading company in the natural gas supply chain to Spain. Its chairman, Francisco Reynés, and the chairman of Sonatrach, Toufik Hakkar, have agreed on the entry into operation of an extension of the Medgaz gas pipeline next autumn. The agreement was reached at a meeting held in the Algerian city of Oran, from where the gas infrastructure to Almeria starts.
Precisely assets such as Medgaz, this gas pipeline in the first place, are the key in the report that the Government is finalizing to condition the partial takeover bid launched by the Australian fund IFM on Naturgy. The agreement entails an increase of 2 bcm (billions of cubic meters) per year in the capacity of the pipeline, which is 25% more, to more than 10 bcm per year from the fourth quarter. The modification involves an investment of US$90 million (€73 million), with the installation of a fourth turbo compressor to increase capacity to the planned figure.
Gas is essential to ensure the energy supply for Spain and other European countries, and will be so in the very long term; it is the only hydrocarbon to which the Community and Spanish energy policy, which aims to reduce atmospheric emissions, leaves a future. In this context it remains a central issue in the world geopolitical battle, as is shown in the conflict affecting the new gas pipeline that will carry more Russian gas to Germany, which is opposed by the USA.
Naturgy emphasizes that "after a decade of uninterrupted operations and an initial investment of more than 1,000 million dollars, the entry into operation of the Medgaz expansion reinforces the security of supply to Spain as it is a key infrastructure for the transport of natural gas", and adds that "the activation of the expansion of the pipeline capacity strengthens the strategic alliance of Naturgy and Sonatrach. The Algerian company is one of the leading suppliers of gas to Spain and is also Naturgy's fourth largest shareholder with a 4% stake". For Reynés, it is an infrastructure that "reinforces the security of natural gas supply to our country, as an essential element to provide guarantee and stability to the process of ecological transition and decarbonization".
Medgaz is owned by Sonatrach (with a 51% stake) and Naturgy (with the remaining 49%, through a company in which the BlackRock fund participates). There is a shareholders' agreement that gives them joint control of the pipeline.
