Spanish Gas Natural’s net profit fell by 15% year on year to €550mn ($640mn) in first half 2017, it said July 26, but it had good news regarding an LNG deal.
GN’s operating earnings (Ebitda) were €2.18bn, 6.6% down if the effect of Colombia’s expropriation of Electricaribe is excluded, but 11.4% lower if included. The Spanish utility, which has significant operations in Latin America, launched arbitration proceedings against Colombia in March to recover its 85.38% Electricaribe stake. In these results, it said its claim against Colombia could exceed $1bn.
Gas distribution made up 40.5% of GN’s overall Ebitda, followed by electricity distribution with 25.1%; electricity sales 19.5% and Gas Sales 15.5%.
GN’s wholesale gas sales increased 13% to 160.9 terawatt-hours of gas (15bn m3), thanks to a 24% increase in sales outside Spain to 86.1 TWh whereas sales in Spain rose by 3% to 74.8 TWh. International sales were buoyed by a 43.5% rise in LNG sales to 48.9 TWh (4.54bn m3).
LNG contract to Puerto Rico doubled
The company said it had successfully renegotiated and extended its supply contract to Puerto Rico Electric Power Authority (Prepa) with effect from October 2017, doubling the annual supply volume to 2bn m3/yr. The 3-year contract is indexed 50%-50% to Brent oil and Henry Hub gas.
Gas Natural is a significant offtaker from Cheniere's Sabine Pass export facility in the US, so can choose to supply Prepa with LNG from there, as well as from GN's portfolio which – in the Atlantic Basin – includes contractual supplies from Nigeria and Trinidad.
GN’s total power generated (in Spain and overseas) was up 4% at 22,286 TWh.
Endesa, a leading utility in Spain that is majority-owned by Italian power giant Enel, meanwhile reported July 26 that its first-half net profits fell by 18% to €653mn. Its total power generation increased by 24% to 37,678 TWh, but a 38% slump in hydro-generation meant it had to double its thermal power generation (gas and coal) to 13,414 TWh which led to added fuel costs for Endesa.
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