November 6, 2009 / 5:26 PM / 9 years ago

Eni may sell TAG pipeline to end EU case - sources

ROME, Nov 6 (Reuters) - Italy’s Eni (ENI.MI) is studying the possible sale of the strategic TAG pipeline, which transports Russian gas through Austria into Italy, to settle a dispute with Brussels, sources close to the issue said on Friday.

European Competition Commissioner Neelie Kroes has asked Eni to sell TAG, which is 89 percent controlled by Eni and seen as strategic by the company and by Italian government, as part of a probe dating from 2007 into restrictive pipeline practices.

Two sources said that Eni, at a hearing with the Commission on Nov. 27, could offer to sell the pipeline — maybe to Italian institutional investors — but try to keep rights to transport gas through the pipeline to honour its existing contracts.

“On that occasion Eni could offer the EU to sell TAG,” said one of the sources.

“This might satisfy the EU, since this way the new owners of the pipeline could make the investments needed to increase its capacity and sell to other operators,” said another source, referring to Kroes’ main complaint about Eni’s ownership of TAG.

Eni declined to comment.

The probe also concerns the TENP and Transitgas pipelines which carry gas into Italy from northern Europe, and in which Eni holds 49 and 46 percent respectively.

Eni has previously proposed to Kroes giving up management of the pipeline, but that offer was considered insufficient. Eni has also said in the past that it would rather pay a fine and keep TAG than divest such a strategically important asset.

Reporting by Alberto Sisto; writing by Stephen Brown

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