Spanish natural gas and electrical energy utilities company Naturgy has acquired joint control of the Medgaz natural gas pipeline, which transports gas from Algeria to Spain.
In addition to its existing 14.95% participation, Naturgy acquired a further 34% stake in the pipeline, purchasing the interest from U.A.E.-based Mubadala Development Company last week.
Naturgy’s financial and strategic participation is complemented by Algerian state-owned Sonatrach, which owns 51% of the pipeline and serves as the leading supplier of gas to Spain.
“It’s a very attractive operation for Naturgy because it is a strategic infrastructure asset … but also because of the financial terms reached in the agreement, which meet our criteria for generating value for the shareholder,” said Naturgy’s CEO Francisco Reynes.
Spanning 200km, the Medgaz pipeline feeds 8 billion cubic meters of natural gas to Spain per year. In 2021, the $1.4 billion infrastructure will be expanded to augment its capacity by 25% to 10 billion cubic meters per year.