Repsol has appraoched Spanish gas company Gas Natural Fenosa over whether it is interested in purchasing a number of LNG assets the oil major is considering selling, Gas Natural's CEO said Tuesday.
"Repsol has invited us to look into the process for its LNG assets," Rafael Villaseca told analysts in Madrid. "We will analyze this and see if they are of interest," he added.
Repsol, which announced last week it would look into selling its LNG portfolio as a means of streamlining its business portfolio and boosting its credit rating, is a 10.5% shareholder in Gas Natural.
Repsol spokesman Kristian Rix declined to comment Monday. Last Thursday Repsol said it was "considering a number of options," but that no decision had been taken.
At present, the two companies have one existing LNG contract between them, for between 1 and 2 billion cubic meters/year, which expires in 2025, Villaseca said, without adding details. They also share ownership of two LNG tankers.
Gas Natural, boosted by the arbitrage which has opened up a thriving LNG reload market in Spain, has been implementing a strategy of two- to three-year contracts with downstream buyers while looking to secure further volumes upstream, including 5 Bcm/year that it will have available from the US Cheniere LNG terminal for 20 years from 2017.
The company said its customer portfolio is evenly split between the Atlantic and Pacific basins.
Repsol said last week that the process of assessing whether to sell off its LNG assets was in a "preliminary stage."
GROWING PORTFOLIO
The Madrid-based company has a relatively modest portfolio of LNG assets but has been growing the business in recent years. The unit generated 8% of its operating earnings last year.
The company controls 75% of the Canaport LNG regasification terminal in eastern Canada, where it is contracted for 100% of the plant's capacity, selling gas in the US Northeast since 2009.
In South America, Repsol holds a 20% stake in the 4.4 million mt/year Peru LNG plant, which came on stream in mid-2010 and is supplied by Peru's large Camisea gas field.
The company also has a 20% share of the four-train, 15 million mt/year Atlantic LNG liquefaction plant in Trinidad and Tobago and a 25% stake in Spain's Bahia de Bizkaia regasification terminal in Bilbao.
Last year, Repsol's LNG business saw operating profits more than double to Eur388 million, helped by higher production and sales from the production startup of Peru LNG.
Repsol said earlier this year it would look to conclude asset sales for as much as Eur4.5 billion ($5.5 billion) as part of its 2012-2016 strategic plan, while it looked to regain A ratings from the major ratings agencies.
Gas Natural's LNG operations include a supply portfolio of 30 Bcm/year and a fleet of 11 tankers, two of which are in shared ownership with Repsol.
The company holds stakes in three regasification plants, at Reganosa and Saggas in Spain and one in Puerto Rico. It also has stakes in liquefaction plants at Damietta, Egypt and Oman and is working on two new reception terminals at Trieste and Taranto, both in Italy.
