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Dutch Gasunie sees cross-shareholding potential with Fluxys, OGE

Netherlands' Finance Minister Jeroen Dijsselbloem attends the Asian Financial Forum in Hong Kong January 13, 2014. REUTERS/Tyrone Siu
Netherlands' Finance Minister Jeroen Dijsselbloem attends the Asian Financial Forum in Hong Kong January 13, 2014. REUTERS/Tyrone Siu

By Geert De Clercq

AMSTERDAM (Reuters) - Dutch Gasunie sees Belgian pipeline operator Fluxys and Germany's Open Grid Europe (OGE) as potential shareholders if parliament allows cross-shareholdings for network operators, Gasunie's chief executive said on Wednesday.

Dutch Finance Minister Jeroen Dijsselbloem ruled out the possibility of an IPO for state-owned Gasunie and electric grid operator TenneT late last year, but has raised the possibility of cross-shareholdings with other grid operators.

Dijsselbloem's proposal will be voted on by parliament later this year, and an approval could open the door to international alliances for the two public grid operators.

"If the possibility arises, we will study cooperation that goes beyond joint ventures. Logically we will then look at Belgium and Germany," Gasunie CEO Han Fennema told Reuters.

He added that no concrete alliance talks were under way as there was no point in starting discussions before the law had been passed. He added Gasunie would stay close to its home market for any alliances it could form in the future.

"We already cooperate a lot with Fluxys, so it is an obvious party (for an alliance), as are some German companies, notably in northern Germany, which means OGE," Fennema said.

In May last year - before the Dutch government ruled out privatization of Gasunie - Fluxys's CEO told Reuters he might seek to buy a stake in Gasunie.

NATIONAL TREASURES

A Fluxys-Gasunie tie-up would create a large European network, connecting Fluxys's Belgian-Italian network to Gasunie's Dutch-German network and onward to Denmark and Russia.

OGE, Germany's biggest natural gas carrier, is also keen on alliances and its CEO Stephan Kamphues told Reuters last year his firm is particularly interested in partnerships with grid operators in neighboring countries.

The EU is keen to see the emergence of large multinational grid operators to boost the single energy market, but an EU grid champion has yet to emerge as many countries hang on to public ownership and the few networks that go on sale are often snapped up by infrastructure investors.

Fennema said that before Dijsselbloem's ruling, a Gasunie IPO had been a possibility, but that avenue is now closed.

"Sentiment goes back and forth but at this moment the feeling in the Netherlands is that companies that are national treasures should not fall in foreign hands," he said.

The Netherlands was one of the first countries to liberalize its energy markets under European Union legislation, and its main electricity producers have been bought up by firms like Germany's RWE and Sweden's Vattenfall.

Fenneman said that while the essence of Dijsselbloem's note is that utilities must serve the public interest, the minister recognizes that European energy markets are becoming more and more integrated, but that Gasunie and TenneT will have to prove that any alliance benefits the public.

He added that the cross-shareholding provision also anticipates that the role of the Netherlands as a gas-producing country is declining and that by around 2025 the country will become a net importer of gas.

"It is logical that in a gas hub strategy we will have to cooperate very closely with other parties, notably in neighboring countries," he said.

A TenneT spokesman said on Wednesday that it too would prefer deals with power grid operators in adjacent markets if parliament gives the go-ahead.

Gasunie, which operates a 15,500 kilometer pipeline network in the Netherlands and Germany and has assets of 9.16 billion euros, said the cold 2012-13 winter helped boost net profit 29 percent to 464 million euros.

Total gas transports rose 8 percent to a record 1,365 terawatt/hours while revenue edged up to 1.53 billion euros.

(Reporting by Geert De Clercq, editing by David Evans)

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