DONG’s offshore gas pipelines to be sold to Danish TSO

Source: Heren

2015/09/21

Danish incumbent DONG Energy will divest its offshore natural gas pipelines to Danish transmission system operator (TSO) Energinet.dk, as part of a strategy ahead of an initial public offering (IPO), DONG has said.

The Danish producer currently owns and operates all the pipelines in the Danish North Sea which send gas from offshore fields to mainland Denmark. It also has a 50% stake in the Tyra West – F3 pipeline which connects the Danish and Dutch offshore systems. The entirety of DONG’s stakes in these pipelines will be sold to state-owned Energinet.dk.

DONG also confirmed on Monday that it will be selling its entire stake in the Nybro gas treatment facility, which processes all of Denmark’s North Sea gas before delivering it to the onshore grid.

However, the producer will maintain ownership of its gas fields in the North Sea.

DONG said that its IPO has been outlined to take place “within 18 months, subject to market conditions.”

A spokesman from the state-owned utility said that “the intention is to sell the assets before the IPO”.

A shipper active in the Danish market welcomed the change in ownership. “I prefer Energinet.dk over DONG as operator,” he said, adding: “the transportation tariff in the pipeline is expensive compared to others. I think there could be many benefits from including [the offshore grid] in the rest of the transmission system”.

The source also said the tariffs could decrease under the ownership of the TSO. “Energinet.dk should not earn on the operations, which calls for lower tariffs and more liquidity, and a lower transportation cost ultimately will lead to more gas beaching in Denmark,” he said.

DONG did not comment on the value of the assets to be divested.

Energinet.dk could not be reached for comment. thomas.rodgers@icis.com