Regulatory Due Diligence of a Multinational Gas and Hydrogen Transport Company

By Dominik Huebler, et al.

The Situation

Fluxys is a multinational gas network, LNG terminal, and gas storage operator with operations across Germany, France, the UK, Belgium, Switzerland, Eastern Europe, and Latin America. Alongside its traditional natural gas transport business, the company is at the forefront of developing hydrogen and CO2 transport infrastructure. Fluxys operates a mix of fully cost-regulated and more lightly regulated assets. Energy Infrastructure Partners (EIP) is a Swiss infrastructure investment fund that was looking to purchase a roughly 20% stake in Fluxys.

NERA's Role

EIP and its co-investors commissioned a NERA team led by Associate Director Dominik Huebler and Senior Consultants Adjmal Sirak—along with analysts Nina Schnyder, Antonio Colomer, and Mai Wang and researchers Philip vom Baur and Fabian Koke—to conduct regulatory due diligence of the European and national regulatory frameworks governing Fluxys’ various natural gas and hydrogen assets. The NERA team analyzed the regulatory frameworks, vendor assumptions, and ongoing developments related to the Russian-Ukrainian war and local regulatory reviews to provide EIP with sound regulatory economic forecasts for its business plan and valuation pointing out risks and opportunities under the different regulatory frameworks and their potential evolution over time.

The Result

On 23 September 2022, EIP and its co-investors reached an agreement with Fluxys’ existing shareholders to purchase the target stake.

NERA experts regularly advise on transactions in the energy and other infrastructure sectors, providing regulatory and commercial due diligence advice on regulated networks, LNG terminals, district heating assets, airports, and other infrastructure.