- Company's board will make decision at Nov. 30 meeting
- Fluxys has been considering increasing stake in link
Gazprom PJSC, the supplier of about 30 percent of Europe’s natural gas, may sell its stake in one of the two pipelines connecting the U.K. to mainland Europe after more than two decades.
The company’s board will consider disposing of its 10 percent stake in the U.K.-Belgium gas link operator, Interconnector UK Ltd., at a meeting on Nov. 30, the Moscow-based producer said in a regulatory filing on Monday. It didn’t clarify whether the sale would be to a Gazprom unit and the company’s press service declined to comment immediately on the planned deal.
Gazprom purchased its stake in the 235 kilometer pipeline that can switch the direction of gas flows between terminals at Bacton in the U.K. and Zeebrugge in Belgium in December 1994. Russia’s state-run exporter has been using the pipe to sell gas in the U.K. through its trading unit Gazprom Marketing & Trading Ltd.
Gazprom rents about 6 billion cubic meters (200 billion cubic feet) a year of the pipeline’s capacity to the U.K. and 2 billion cubic meters in the opposite direction, according to its Oct. Eurobond prospectus. The link has an annual capacity to Britain of 25.5 billion cubic meters and to Belgium of 20 billion. Britain used 66.7 billion cubic meters of gas last year and Belgium 14.7 billion, BP Plc data show.
Parity joint ventures of Italy’s Snam SpA and Belgium’s Fluxys SA own 31.5 percent of the link, according to Interconnector’s website. Fluxys has 25 percent more through its own unit while an investment group, Caisse de Depot et Placement du Quebec, also known as CDPQ, owns and controls 33.5 percent in the pipe.
“We were contemplating an increase of our shares in Interconnector U.K., with a view to further developing our position as a crossroads for international gas flows in Europe,” Fluxys spokesman Laurent Remy said by e-mail. “Preliminary contacts have been held with existing shareholders.”
In October 2014, Gazprom Chief Executive Officer Alexey Miller said his company was reviewing its strategy of targeting end-customers in Europe because it wasn’t “a buyer’s market” and as Russia’s energy ties with Europe soured over the conflict in Ukraine. Last month, Miller said the company is again targeting European end-users as it agreed on doubling the capacity of a pipeline under the Baltic Sea from Russia to Germany.
Miller met Fluxys CEO Walter Peeraer Oct. 6 to discuss Russian gas transit
through Belgium and other potential projects, Gazprom company reported at
the time without elaborating.