SNMRY Snam SPA (PK)

   By Kjetil Malkenes Hovland 
 

OSLO--Oil and gas producer Statoil ASA (STO) said Tuesday it had sold its 20% stake in the Trans Adriatic Pipeline AG to Italian gas pipeline operator Snam SpA for 208 million euro ($220.06 million), partly to reduce its spending obligations.

"This divestment increases our financial flexibility and is in line with our strategy of portfolio optimization and capital prioritization," said Jens Okland, Statoil's executive vice president for marketing, midstream and processing.

Running 882 kilometers from Turkey through Greece and Albania to Italy, the Trans Adriatic Pipeline will be the westernmost part of the 3,500-kilometer, $45 billion Southern Gas Corridor, which is set up to bring gas from Azerbaijan's Shah Deniz gas field to the European market via Georgia and Turkey toward the end of this decade.

The purchase price for Statoil's 20% stake in the TAP pipeline was EUR130 million, Snam said. In addition, the Italian pipeline operator also takes over a credit facility agreement of EUR78 million granted by Statoil to TAP.

"TAP is crucial to the diversification of gas sources in Europe," said Snam Chief Executive Carlo Malacarne. "Snam's entry in the project will reinforce its primary role and that of Italy's infrastructure in boosting competition among supply sources and strengthening security of supply for the European gas system."

Statoil has been a partner in the TAP pipeline since 2008, but has gradually reduced its ownership in the Shah Deniz field, divesting a 10% stake to SOCAR and BP in 2013 for $1.45 billion and exiting the project in 2014 by selling its remaining 15.5% stake to Malaysia's Petronas for $2.25 billion.

Since 2009, Statoil has divested about $25 billion in assets, including stakes in oil and gas fields off Norway, pipelines, and its gas station unit.

The TAP pipeline transaction is expected to close by the end of 2015.

Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com

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(END) Dow Jones Newswires

December 01, 2015 04:15 ET (09:15 GMT)

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