Enagas Profits Buoyed by Chile, Despite Peru

Spanish gas grid owner-operator Enagas’s 1H profits increased by a quarter year on year, despite problems in Peru.

Excluding proceeds from Enagas’s part sale of the Chilean LNG import terminal at Quintero (GNLQ), Enagas 1H net profits were €217.6mn ($251.4mn), a rise of only 1.6%, so in line with targets set for the year. But once proceeds from the sale were included, 1H profits increased by 25.6% to €269.1mn. The Spanish firm sold a 34.6% stake in GNLQ for $341mn to Canada’s Omers in April but still retains joint control of the Chilean terminal.

Enagas said that demand for natural gas across Spain grew by 6.5% in 1H 2017 year on year, and is expected to end about 3% up. Gas-fired power generation was up by a fifth thanks to lower hydro and wind generation and greater demand for power. On June 21, gas demand for power hit 465 GWh, the highest since 2011.

Enagas also said it reduced net debt by €607mn in the past six months to €4.48bn at end-June.

Net investments in 1H2017 were €202mn, of which €35mn ongoing in Spain and €84.8mn on Enagas’s 16% interest in Trans Adriatic Pipeline. However that net ‘investment’ also included a quarter-share in a non-performance penalty totalling $262.5mn (€213mn) forfeited by the Odebrecht-led Gasoducto del Sur Peruano consortium (Enagas: 25%) to the Peruvian government in February 2017, when its financially troubled Brazilian operator Odebrecht failed to invest the sums promised in the pipeline venture.

Enagas has interests in two other pipeline businesses in Peru that are operating normally: 28.94% of Transportadora de Gas del Peru, and 51% of Compania Operadora de Gas del Amazonas (Coga).

Update: Enagas has since told NGW that its investment in Gasoducto del Sur Peruano is $275mn, of which $162mn in bank guarantees which were contributed in the bridge loan, and $65mn in performance guarantees. [The latter corresponds to its 25% share of the $262.5mn forfeit by the consortium in February]

Mark Smedley