Exxon Mobil to Offload Majority Ownership of Italian LNG Terminal to BlackRock

04 Oct, 2023

Exxon Mobil to Offload Majority Ownership of Italian LNG Terminal to BlackRock

Exxon Mobil Corp (XOM.N) is currently in advanced negotiations with BlackRock (BLK.N) over the possible sale of its controlling stake in Italy's primary liquefied natural gas (LNG) import terminal. This development comes as Exxon seeks to implement its strategic plan of divesting non-core assets and optimizing its portfolio in response to changing market dynamics.

Back in March, Exxon Mobil had made it known that it was exploring the option of selling its 70.68% interest in the Adriatic LNG Terminal, which is located offshore in the Adriatic Sea near Italy. The terminal plays a critical role in Italy's energy infrastructure, serving as a vital gateway for LNG imports. The facility allows for the reception, storage, and regasification of LNG, making it a key component in Italy's energy supply chain.

The remaining ownership stakes in the Adriatic LNG Terminal are held by QatarEnergy (QATPE.UL), a subsidiary of the state-owned Qatar Petroleum, at 22%, and Italian gas grid operator Snam (SRG.MI) at 7.3%. This ownership structure highlights the international nature of the terminal, with QatarEnergy representing a significant global player in the LNG industry.

One of the driving factors behind this potential divestiture is Italy's plan to increase its LNG imports. This move is seen as a strategic response to diversify its energy sources and reduce reliance on gas supplied via pipelines from Russia. In a changing geopolitical landscape, ensuring a diversified and secure energy supply is of paramount importance, and LNG plays a pivotal role in achieving this goal.

The sale of Exxon's majority stake in the Adriatic LNG Terminal garnered significant attention from various quarters, including infrastructure funds and international entities. It's worth noting that this strategic asset is estimated to be valued at around 800 million euros ($881 million), according to previous reports by Reuters. The high level of interest underscores the terminal's strategic importance in the context of Europe's energy landscape.

Exxon Mobil's selection of BlackRock as the potential buyer follows a rigorous evaluation process that involved several prospective buyers. However, it's important to emphasize that a final agreement has not yet been reached, and specific terms and conditions of the transaction remain undisclosed. Negotiations are ongoing, and both parties are actively working towards a mutually beneficial arrangement.

This potential transaction not only reflects Exxon Mobil's commitment to optimizing its asset portfolio but also highlights the attractiveness of energy infrastructure assets, particularly in the LNG sector, to global investors like BlackRock. It underscores the evolving dynamics of the energy industry and the strategic importance of LNG in securing energy supplies for nations like Italy in an increasingly complex and competitive global energy landscape.