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Czechia approves purchase of gas transmission operator NET4GAS Holdings

The Czech government on Wednesday (27 September) tasked state-owned Czech Transmission System Operator (ČEPS) with acquiring NET4GAS Holdings, the sole holder of an exclusive license for gas transmission in Czechia.

At present, Czechia does not have direct state control over gas transmission. The acquisition of the company is “another measure” to enhance the country’s energy security, Czechia’s Industry and Trade Ministry said in a press release.

The exact price of the acquisition is expected to be disclosed following the signing of a purchase agreement, the Ministry added.

“Net4Gas owns 4,000 kilometres of gas pipelines that transport gas through Czech territory and operates three border transfer stations, five compression stations, and a hundred delivery stations for further gas distribution. The company holds an exclusive license for gas transportation in the Czech Republic,” said Jozef Síkela, Czechia’s Minister of Industry and Trade. “There is no substitute for the Net4Gas company. If we want to import gas into the Czech Republic, it will be their responsibility. All this means, that we are purchasing the cornerstone of the Czech energy security.”

In case of emergencies, NET4GAS manages the country’s gas network and declares regulatory levels, thus deciding on gas deliveries to customers. “Any problems with NET4GAS pipelines would significantly jeopardise gas supplies to the country,” the Ministry noted.

The financial balance of NET4GAS Holdings between 2015 and 2022 had a total post-tax profit of 27.7 billion Czech koruna (1.13 billion euros). In addition, the company has financial assets totalling 6.8 billion Czech koruna (277.6 million euros), issued bonds worth 18.5 billion Czech koruna (755.3 million euros) and loans of 14.5 billion Czech koruna (592 million euros) with maturities between 2025 and 2028, according to the Ministry.

“The state is not just buying gas pipelines and compression stations, but it is taking over the entire NET4GAS company, including its experienced management and employees,” says Minister Síkela, noting that the purchase price is fair according to assessments from reputable, trustworthy institutions. “This has been confirmed by both one of the world’s largest banks and a renowned international consulting firm. The specific amount will be disclosed this Friday after the signing of the purchase agreement.”

NET4GAS’s gas pipelines could become part of a hydrogen corridor that envisions transporting up to 16 billion cubic meters of gas annually from Ukraine via Slovakia and Czechia to Germany in the future. However, “substantial investments” will be needed to use the pipelines for hydrogen, the Ministry noted.

The project could also benefit from financial support from the European Commission, according to the Czech government.

In 2024, the contract for gas transit from Russia through Ukraine will expire. If not renewed, countries like Slovakia, Austria, and Hungary would rely on gas deliveries through the Czech Republic. “Given the changes happening in European energy, it is essential for the state to have the ability to support necessary changes and the implementation of new projects. NET4GAS Holdings ensures international transit, meaning gas transportation for customers through the Czech Republic and to it. That’s why this infrastructure is so crucial for us,” Minister Síkela added.

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