![Elengy LNG assets in France [source: Elengy]](http://gastopower.co.uk/media/k2/items/cache/7454ca3f265c5fddfd6487140f42854f_S.jpg)
Engie and GRTgaz have signed a preliminary memorandum of understanding for the acquisition of Engie's LNG subsidiary Elengy by GRTgaz.
Engie owns 75% of shares in GRTgaz, the French natural gas transmission operator, along with SIG (25%).
“This transformation project illustrates the importance of natural gas in the strategy of Engie” the company said in a statement, adding it "responds to both European gas infrastructure challenges and market player needs” as “the market is currently subject to infrastructure consolidation where very large players are integrating several gas chain businesses, in particular LNG terminals and gas transmission networks.”
“GRTgaz’s acquisition of Elengy, bolstering GRTgaz with high quality LNG assets, would thus enhance France’s position as a well-regulated market at the crossroads of international LNG trading” it added.
Elengy operates three LNG terminals in France: Montoir-de-Bretagne, Fos Tonkin and Fos Cavaou.
The move happens against the backdrop of the increasing role of natural gas in the French power generation mix, particularly this winter, which has seen colder temperatures and unavailability of nuclear power plants leading to increased demand for gas-fired generation. In a note in November, GRTgaz and TIGF had said that “record levels of demand have been placed upon the gas-fired power plants" noting power in excess of 6.5 GW has been regularly required, with peaks in excess of 8.5 GW.
The planned acquisition will be submitted for clearance to the French Energy Regulatory Commission (CRE) and to the governing bodies of the companies involved.