Total's TIGF Auction Moves to Final Stages
Reports indicate that two consortias have emerged as the front-runners for the acquistion of Total Infrastructures Gaz France (TIGF), the gas transport and storage business of Total SA.
TIGF’s owns 5,000 kilometers of pipeline in southwestern France transports about 12 percent of the country’s natural gas.
One consortium is led by Caisse des Dépôts et Consignations (CDC) sovereign wealth fund, which already holds in gas distribution through its CDC Infrastructure unit, including in GRTgaz, which covers 80 per cent of gas transport in France.
CDC’s partners includes the private equity unit of France’s Axa insurance and the Predica insurance unit of France’s Crédit Agricole bank, the Abu Dhabi Investment Authority and Fluxys, the Belgian natural gas operator.
The other leading contender is led by France’s EDF, with Italian gas transport group Snam and Singapore’s sovereign wealth fund.
Analysts value TIGF at between €2bn and €3bn but, according to one person familiar with the situation, final bids are likely to be towards the bottom of the range. They are to be submitted on February 4, a week later than originally scheduled.
TIGF was put up for sale by Total said last year as part of disposal program to of a wider strategy to sell as much as €20 billion ($26.76 billion) worth of assets by 2015
Spain’s Enagás, which had has formed a consortium with Canadian infrastructure fund Borealis, is reportedly no longer in the running. The Madrid-based company was thought to be considering TIGF to transport natural gas from the Iberian peninsula.
Final bids are reported to be required to be submitted for review by February 4th.
Gas transmission system are attractive investments for pension funds, insurers and sovereign wealth funds as they provide for a more stable cash flow and earnings.
In May 2012, EON agreed to sell Open Grid Europe GmbH, Germany’s biggest gas-transmission system to Macquarie Group Ltd, Munich Re, the Abu Dhabi Investment Authority’s Infinity Investments and British Columbia Investment Management Corp., for 3.2 billion Euros. Open Grid, which was formerly the gas transmission arm of E.ON Ruhrgas, was separated into its own company in 2010 in response to EU competition directives. It controls over 12,000 kilometres of pipeline through Germany and is a major transit point for the imports of Russian gas.
Earlier in 2012, RWE AG sold its gas transmission grid unit Thyssengas GmbH to infrastructure funds for around EUR500 million. Thyssengas transports almost 10 billion cubic meters of natural gas annually through a 4,100-kilometer pipeline network.
In 2011 Total agreed to sell its 6.4 percent stake in the Norwegian Gassled pipeline network to Silex Gas Norway AS, owned by German insurer Allianz SE.