Saturday, January 20, 2018

Repsol to sell lng assets


Spanish energy giant Repsol is negotiating the sale of a block of liquefied natural gas assets, including its stake in Pt Fortin-based Atlantic LNG, with more than one international bidder and expects to finalise a deal in the coming weeks, a source with knowledge of the matter said yesterday.

Repsol is selling LNG assets based in Canada, Trinidad and Tobago and Peru in a drive to remove debt from its balance sheet and improve its chances of keeping an investment grade rating, Canada's Financial Post reported.

Earlier, newspaper Cinco Dias said Repsol would likely announce the sale of the assets to Royal Dutch Shell after a board meeting today.

Repsol declined to comment on any deal, but said the sale of the LNG assets was not on the board's agenda for today, the Financial Post reported.

Shell also declined to comment.

Repsol has not provided an official valuation of the LNG interests but in a presentation in August said they had off-balance sheet debt of 3.6 billion euros and gross debt of one billion euros.

China's Sinopec, Russia's Gazprom, GAIL Ltd of India and GDF Suez of France in consortium with China's sovereign wealth fund CIC have been tipped as other potential bidders, the Financial Post said.

Goldman Sachs is advising Repsol on the sale, which the oil firm has said it wants to carry out in one block rather than hiving off the assets, in which it is not the sole shareholder.

However, some analysts have expressed doubts that the company could fetch interest for the whole block, particularly from a company like Shell.

"We find the logic of such a deal difficult from Shell's perspective. We would not expect it to show much interest in Repsol's stakes in either Atlantic LNG or Canaport, but there may be some synergy on Peru LNG," said Peter Hutton of RBC Capital Markets in the Financial Post.

Repsol's officials in Port of Spain could not be immediately reached for comment yesterday.