May 27, 2019 / 5:16 PM / a year ago

Italy's Iren mulling sale of stake in LNG plant, had contact with Snam: sources

MILAN (Reuters) - Italian regional utility Iren is considering selling its 49.1% stake in the country’s second-biggest liquefied natural gas terminal and has been in touch with possible buyers, including gas infrastructure group Snam, sources said.

Iren, controlled by a group of cities in northern Italy including Turin and Genoa, invested around 900 million euros ($1 billion) with Germany’s Uniper in 2013 to build the OLT LNG terminal.

But Uniper said in March it had agreed to sell its 48.2% stake to Australian fund First State Investments for around 400 million euros.

OLT said on Monday that the deal had now been completed, giving Iren, under an agreement with Uniper, the right to also sell its stake to First State if it so wishes.

Iren is also free to sell to another buyer and a move by Rome to place LNG terminals on a list of strategic assets may favor an Italian purchaser.

Italy’s government is increasing its commitment to renewable energy but counts gas as an important transitional source, allowing it to exercise so-called golden powers to protect assets by attaching conditions or blocking any deals.

On Sunday, Italian business paper Milano Finanza reported that Iren might sell its stake in OLT.

One of the sources said Iren has until the end of September to take a decision on selling to First State.

A second source said there had been contacts about the asset with Snam, which runs Italy’s backbone gas transport network.

Snam, whose biggest shareholder is state lender Cassa Depositi e Prestiti, has a 7.3% stake in the country’s biggest LNG plant at Rovigo. It also owns the smaller Panigaglia terminal in the north west.

“A deal with Snam would ensure the asset did not fall into foreign hands,” the source said.

OLT operates the OLT Offshore LNG Toscana terminal off the Tuscan coast between Pisa and Livorno. It has a capacity of 3.75 billion cubic meters a year.

Iren and Snam declined to comment.

Reporting by Stephen Jewkes; Editing by Kirsten Donovan

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