SSE completed its exit from gas distribution, announcing the sale of its remaining one-third of SGN (Scotia Gas Networks) to existing investors.
The generator-developer accepted £1.225 Bn in cash from Brookfield Infrastructure Partners and the Ontario Teachers’ pension fund.
The deal concludes SSE’s disposals programme announced in June 2020. Intended to raise £2bn towards network development and Net Zero goals, the round of sales raised £700 million more.
The group’s focus has sharpened exclusively towards electricity generation, supply and systems operation, in line with opportunities arising from national imperatives towards decarbonisation.
SGN includes Scotland Gas Networks and Southern Gas Networks, two of Britain’s eight regulated gas distribution networks. Northern Ireland-based SGN Natural Gas complete the deal, alongside other non-regulated ancillary businesses.
SSE’s finance director Gregor Alexander said SGN had been a hugely successful investment during its 16 years in SSE’s ownership.
“However, it has become purely a financial investment for SSE as we have sharpened our focus on our low-carbon electricity core, and it is therefore the right time for SGN to continue to thrive under new ownership”
Meanwhile market prices for gas are at record highs, as supply tightens across Europe due to low stores.
Analysts Hartree Solutions today reported that prices for July delivery closed at an unprecedented 90.6 pence per therm, breaking December 2013’s previous monthly record of 86.4 pence per therm.
Driving the hike are low stocks held across Europe, coupled with lower production from the North Sea. In consequence, Europe’s competition with rising Asian demand for LNG is intensifying, prompting fears of blockages if the continent experiences an unusually cold winter.
More on Hartree’s analysis here.