Portugal's REN Expands into Chile

Portugal’s national power and gas grid and LNG terminal operator REN has acquired a 42.5% stake of Chilean gas grid Electrogas.

Electrogas has 165.6 km of reversible gas pipelines linking Chile’s Quintero LNG regasification terminal to the capital Santiago, plus various power plants along the way.

REN said February 7 it completed the purchase of the stake for $180mn from Enel Generacion Chile (EGC), a subsidiary of Italian power utility Enel. The Portuguese firm said its acquisition marked “an important step towards its internationalisation” under its 2015-18 strategic plan. European network operators, faced by regulated margins and sometimes shrinking gas throughput, have increasingly looked abroad to diversify. However for one, Spain's Enagas, it has not always gone well, as one venture in which it had invested, Peru's GSP pipeline, had its operating concession terminated last month.

When first announced in mid-December, Enel-owned EGC said it would book a net gain of $123mn from the divestment.

Shareholder structure of REN (Graphic credit: Portugal's REN) 

REN’s largest shareholder is China’s State Grid of China (SGC) with 25%, followed by Oman Oil 15%, while Spanish power grid REE, Portuguese utility EDP and US fund Capital Group each have 5% stakes.

China's SGC also owns similar stakes in Italian grid operators Terna (power) and Snam (gas) and various power grid operators in eastern Australia, Brazil and the Philippines.

Spain's Enagas meanwhile has a 60% overall stake in Chile’s Quintero LNG terminal, owning 40% outright, plus a half-stake in a further 40% owned by an Enagas-Oman Oil joint venture.

Mark Smedley