March 20, 2019 / 3:30 PM / 3 months ago

Uniper talks to sell Italy LNG plant stake raise eyebrows in Rome

MILAN/FRANKFURT (Reuters) - Germany’s Uniper is in advanced talks with Australian fund First State Investments to sell its stake in a liquefied natural gas terminal in Italy, three sources said on Wednesday, raising concerns in Rome over the sale of strategic assets.

FILE PHOTO: A logo of German energy utility company Uniper SE is pictured in the company's headquarter in Duesseldorf, Germany, March 8, 2018. REUTERS/Thilo Schmuelgen

“There’s no final deal yet but First State is about to make a binding bid,” one of the sources said, adding the deal valued the terminal at around 800 million euros ($909 million).

Energy firm Uniper holds a 48.24 percent stake in the OLT LNG terminal, while Italian multi-utility Iren owns 49.07 percent. The two shareholders invested around 900 million euros to build the plant back in 2013.

Italy’s government has placed LNG terminals on a list of strategic assets and can exercise so-called golden powers to protect them by attaching conditions or forbidding the deal.

In a tweet on Wednesday, Italy’s Foreign Office Junior Minister Guglielmo Picchi said the government should carry out a preventive review before any sale to protect national security.

“More caution and sharing is needed before (strategic assets) are sold by Germans to Australians,” he said.

With 64 percent of its revenues guaranteed, OLT shares characteristics with regulated power and gas grids that have met with strong interest from infrastructure investors.

First State Investments, the asset management arm of Commonwealth Bank of Australia (CBA), has been interested in the assets for about two years, when news about a potential sale by Uniper first surfaced.

Demand for LNG is growing in Europe as it becomes increasingly competitive and offers a way for the region to wean itself off its dependence on Russian gas.

A recent fall in volumes of gas imported into Italy from Algeria - where prices are indexed to oil - was due to the availability of cheaper gas elsewhere, one industry source said.

Under its shareholder agreement with Uniper, Iren has the right to sell its stake to any buyer of the other’s holding.

But Iren, controlled by a group of cities in Italy’s north including Turin and Genoa, has taken no decision as yet, one of the sources said.

Italian daily Milano Finanza earlier reported that Uniper might sell its stake to First State.

Uniper and Iren declined to comment. First State was not immediately for comment.

Uniper, in which Finland’s Fortum owns a 49.99 percent stake, sees LNG as a growth market and aims to get a terminal off the ground in its home market of Germany, where rival RWE plans to do the same.

Uniper plans a floating storage and regasification unit in Wilhelmshaven. In January it signed a deal with ExxonMobil that would see the oil major take a substantial share of capacity at the planned site.

Editing by Valentina Za and Jan Harvey

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