Eni, an Italian multinational oil and gas company, has agreed to sell 49.9% of its stake in subsidiaries operating two groups of gas pipelines, the Trans Tunisian Pipeline Company (TTPC) and the Trans-Mediterranean Pipeline Company (TMPC), that run between Algeria and Italy, to Snam, an Italian energy infrastructure company, for $435.7 million, subject to Tunisian government approval and shareholder approval. The deal is expected to be completed in the third quarter of 2022.

According to the revised agreement:

1. Eni will transfer its ownership stakes in the onshore TTPC pipeline, which runs from the Algeria-Tunisia border to Tunisia’s coast, and the offshore TMPC gas pipelines, which connect Tunisia’s coast to Italy, to a newly formed Italian company called NewCo, in which Eni will retain a 50.1% stake.
2. Snam will pay for the purchase using its funds, which are mostly obtained by administering Italy’s natural gas transport grid and operating the majority of the country’s gas storage facilities.
3. The agreement contains a revenue-based earn-in and earn-out mechanism based on the revenues earned by the target companies – entities that are now active in the pipelines and will be controlled by NewCo – which generated a combined income of roughly $101.6 million in 2020.
4. Eni and Snam will share ownership of NewCo based on equal governance standards, with the two firms announcing that they will consolidate shares based on the equity.

Snam CEO, Marco Alverà, said: “This deal consolidates Snam’s central role in Italy’s security of supply, as well as in energy transport from the Mediterranean region. Through this transaction, Snam is bridging its infrastructure towards North Africa, which represents a key area for gas supplies to Italy and forward looking for hydrogen development.”

Commenting, the CEO of Eni, Claudio Desclazi, said: “This transaction allows us to free up new resources to be used on our energy transition path while at the same time maintaining the management of a strategic infrastructure with Snam to ensure the security of natural gas supply to the country.”

“Gas will play a key role in the transition of energy systems to zero-emission models, and it is important to maintain the availability and diversification of supply routes for this resource,” he added.