Italy's ENI to sell gas pipelines to assuage EU

(BRUSSELS) - Italian energy group ENI announced Thursday it will sell its interests in three international gas pipelines to bring to end an EU probe over suspicions of abuse of its dominant market position.

"It has been a painful process from our side," admitted ENI chief executive officer Paolo Scaroni at a joint press conference in Brussels with EU Competition Commissioner Neelie Kroes.

But "we propose the divestment of these pipelines," he said, thereby adding the Italian firm to French counterparts EDF and GDF and Germany's EON and RWE who have made concessions to the EU and Kroes to assuage concerns over the reach of the energy heavyweights.

The EU had expressed concerns that the management and operation of natural gas transmission pipelines by ENI could breach EU antitrust rules' ban on abuse of a dominant market position.

Therefore the 89 percent share which ENI, "strategic" for Italy as it brings Russian natural gas through via Austria "will be sold to an Italian state entity," probably the Cassa Dei Depositi E Prestiti -- Italy's public finance agency -- Scaroni said.

ENI will also auction off the TENP et Transitgas pipelines which link the north sea to Italy via the Netherlands, Germany and Switzerland. Its holdings in these entities are 100 percent and 46 percent respectively.

Scaroni said that ENI's partners Swissgas and EON would have "preemption rights" in these sales, while ENI itself will still hold the transportation rights.

The ENI CEO said the whole sell-off should produce around 1.5 billion euros (2.1 billion dollars).

The European Commission welcomed the "structural remedies."

"I consider these proposals as a very positive step forward. Subject to a successful result of the market test, the commission will take a final decision accepting them and making them legally binding on ENI," said Kroes.

The ENI case was launched in the wake of the energy sector inquiry, following concerns that the Italian company's behaviour was blocking competitors' access to the transport infrastructure needed to import gas into Italy to the detriment of consumers.

The EU began its proceedings after raiding ENI premises back in May 2007.