Italian oil major Eni has gone public with its willingness to divest its shares in three pipelines in order to end an antitrust investigation that the European Commission launched against the company back in May 2007. The EC accused the Italian firm of 'capacity hoarding and strategic underinvestment in the transmission system, leading to the foreclosure of competitors and harm for competition and customers'.
The EC - the EU antitrust watchdog - has welcomed the new proposals and said it will conduct a market-test before letting the sale go ahead.
After having repeatedly refused to sell its shares in the pipelines owing to their 'strategic' nature, Eni has now offered to sell its 49%, 46% and 89% stakes in the Trans Europa Naturgas Pipeline (TENP), Transitgas and Trans Austria Gasleitung (TAG) pipelines, respectively. The sum value of the shares is thought to be at around 1.5 billion Euros.
Should the EC's market test approve the divestment of Eni's shares in the three pipelines, the Italian company would avoid a hefty fine and the sale would mark the end of a long battle. The EC has been using both legislative proposals and antitrust measures in its drive to liberalise Europe's energy sector further. Under EU law, European Competition Commissioner Neelie Kroes has the power to fine groups up to 10% of their global annual turnover (Eni reported a net profit of 8.8 billion Euros for 2008) if there are formal rulings against them on grounds of antitrust, but she has been keen to break up energy groups instead.
Most significantly, Eni has agreed to sell its 89% stake in the TAG pipeline - the most valuable asset of the three. Under its proposed stake sale Eni has however stipulated that its share in the TAG pipeline would be sold to an Italian state-owned entity, owing to the line's strategic importance. The 1,140 kilometre long pipeline (in which Austria's OMV holds the remaining 11%) has a capacity of 37 billion cubic meters (bcm). This was expected to be increased by 6.5 bcm by the end of last year.
Eni's previous opposition to the sale of its share in TAG has been supported by the Italian state, which maintains a 36% stake in Eni. It is likely that TAG will be sold to Italy's public finance agency the Cassa Dei Depositi E Prestiti, according to Paolo Scaroni, Eni's CEO.