Czech government approves deal for Net4Gas purchase
PRAGUE, Sept 27 (Reuters) - The Czech government approved a plan for state-controlled electricity transmission grid operator CEPS to acquire natural gas transmission system operator Net4Gas, Industry Minister Jozef Sikela said on Wednesday.
The deal is the latest step by the Czech government as it seeks to get a bigger hand in energy infrastructure, while it gives an exit for Net4Gas's owners Omers and Allianz Infrastructure after Russia cut gas deliveries to Europe.
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The Industry Ministry said details on price would be released after the acquisition was signed.
A source told Reuters last week that under a deal, CEPS would pay a small amount for the shares of the company but assume Net4Gas debt of around 1.4 billion euros.
"There is no substitute for Net4Gas," Sikela said.
"If we want to import gas to the Czech Republic, the company will be handling that. We are buying a basic building block of Czech energy security."
Net4Gas operates nearly 4,000 km of pipelines shipping gas to and from Germany and Slovakia and for domestic consumption.
It was heavily dependent on Russian gas, with 75% of revenues from contracts with Gazprom, according to company filings.
In January, Russia's Gazprom stopped paying the Czech firm.
Russia cut off most of its gas deliveries to Europe after its invasion of Ukraine and as Western governments expanded sanctions against Moscow.
Before a halt to the Nord Stream pipeline, Net4Gas transported Russian gas from that route to the Czech Republic and onwards through Slovakia to Austria.
Gas flows passing through to other countries dropped by nearly 98% year-on-year in the second quarter as flows across Europe were rerouted, making the Czech Republic a destination rather than transit country, according to data from the Czech energy system regulator ERU.
The Czech ministry said Net4Gas's infrastructure could be part of a future hydrogen corridor in Europe.
(Reporting by Jason Hovet; editing by Grant McCool)