The possible sale of the Czech Republic’s gas pipeline assets by Germany’s RWE looks like it could be seriously undermined by Russian gas exporter Gazprom’s statement that it wants to avoid all gas shipments through Ukraine.
Gazprom’s statement puts a big question mark over the future value of the Czech infrastructure owned by Net4Gas, the pipeline company, part of RWE’s Czech group RWE Transgas, which the German parent company is considering selling to reduce its debt burden.
Net4Gas’s main asset is the now aging east-west stretch of pipeline running from the south-east to the north-west of the country taking natural gas to western Europe after being shipped through Slovakia and Ukraine.
Gazprom’s long-term intentions to bypass Ukraine, through which around 80 percent of Russian gas shipments to the west still transit, is likely to dramatically cut the price RWE could claim for Net4Gas, Czech business daily E15 reported on Monday. “It is clearly bad news,” commented energy analyst Jiří Gavor.
Gazprom has already started the ship gas by other routes than the Ukraine, such as the Nord Stream pipeline under the Baltic Sea to Germany, with preparations for a southern version, South Stream, under the Black Sea completed and now waiting for final approval.
RWE says that it is still weighing up the sale of Net4Gas following reports at the start of the month that it had stepped up its preparations amid mounting evidence that the sale will proceed. Signs include a statement from the Czech energy regulator that it is preparing a memorandum of information for would be bidders and earlier comments about their interest from local energy companies.
Czech Industry and Trade Minister Martin Kuba (Civic Democrat, ODS) expressed his fears about the security aspects of a new owner of Net4Gas at an energy conference last week. A representative of Net4Gas said at the same event that he was sure that economics would triumph over politics and Ukraine would remain a key gas transit country for Gazprom in spite of the frequent squabbles between Moscow and Kiev.
Czech energy group Energetický a Průmyslový Holding (EPH) and local gas exploration, production and storage group KKCG have both said they would be interested in bidding for Net4Gas. Gazprom itself might be a logical bidder, and its declaration might be seen as a means of cutting the price for the gas pipeline assets in the Czech Republic and also those in neighboring Slovakia, where a 49-percent stake in the country’s main gas company, SPP, is expected to be sold by a consortium of E.ON Ruhrgas and Gaz de France.