Naturgy and Eni broke the agreement they had with Egypt in the middle of the year because of the coronavirus. However, a few months ago, they have resumed contacts with the Egyptian government to try to reach a solution, as indicated by the Economist.
At the same time, this same week, progress is being made in the US justice system with the measures taken by Naturgy and Eni to try to collect the arbitration award that recognizes them as having a right to collect more than $2.6 billion (€2.2 billion), and there have been several court hearings.
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In December of last year, UFG won the first lawsuit against Egas
The agreement that is being considered, and for which they have even already begun proceedings in Brussels, would mean the purchase by the Italian oil company of the Damietta regasification plant, and in exchange, Naturgy would receive financial compensation. The agreement would be similar to the one signed last February. The companies reached an agreement whereby Naturgy would receive around $892 million (€750 million). The Spanish company and ENI valued the company at $1.62 billion (€1.36 billion), of which $1.43 billion (€1.2 billion) corresponded to the assets in Egypt and the other $357 million (€300 million) to the rest of the world.
After the agreement, Naturgy was to receive a cash payment of $648 million (€545 million), as well as most of the assets outside Egypt, excluding the natural gas trading activities in Spain, which would remain in the hands of ENI, which in practice meant taking a 7.36% stake in the Qalhat liquefaction plant, in Oman, and the charter contracts for the Galicia Spirit and Cádiz Knutsen methane tankers. On the other hand, Eni kept the commercial business in Spain in order to avoid that the operation could have problems in Competition.
On February 27th, 2014, Unión Fenosa Gas presented the arbitration procedure through its law firm King & Spalding (which also worked with Gas Natural in the dispute it had with Algeria) and the case has continued. The company has filed a total of five claims: the first in Cairo (Egypt), the second at the International Centre for Settlement of Investment Disputes (ICSID) and the third in Madrid, which remains unresolved.
In December of last year, UFG won the first lawsuit, against Egas, which will have to pay it $7.14 million (€6 million) for interrupting the gas supply, and the second won it with the imposition of the $2 million (€1.7 million).
With the closing of this operation, if it is finally achieved now, the company will advance in the asset rotation plan that it plans to present next February and in which it has already divested itself of the business in Chile as well as the participation in four technological subsidiaries, as this newspaper advances today.
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First published in elEconomista.es, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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