Net4Gas holds the exclusive licence to transport natural gas in the Czech Republic

Profile of the Net4Gas group, which operates an extensive system of gas pipelines and transfer stations in Czechia (the state-owned company ČEPS today bought NET4GAS Holdings):

– Net4Gas holds the exclusive licence to transport natural gas in the Czech Republic. In an emergency, it manages the gas system and declares restriction levels, thereby deciding on gas supplies to customers. It operates 4000 kilometres of pipelines, five compressor stations and around 100 transfer stations, including three at the borders.

– The Net4Gas group is owned by Net4Gas Holdings, which is jointly owned in equal shares by the consortium comprising Allianz Infrastructure Luxembourg I S.à r.l. and Borealis Novus Parent B.V. In the past, Net4Gas operated under the names Tranzitní plynovod, Transgas and RWE Transgas Net. The state was the original owner; after privatisation in 2002, the German group RWE took over. In March 2013, Germany’s RWE sold Net4Gas to a consortium of German insurer Allianz and Canadian investment group Borealis for 1.6 billion euros (40.9 billion crowns at the exchange rate at the time). Czech groups KKCG and Daniel Křetínský’s Energetický a průmyslový holding (EPH) were among those that unsuccessfully bid to buy Net4Gas.

– Last year, Net4Gas transported 30.9 billion cubic metres of natural gas, 20.8 billion cubic metres less than in 2021. In 2022, Net4Gas transported 7.5 billion cubic metres of natural gas for domestic use in the Czech Republic. Domestic transportation thus fell by 1.9 billion cubic metres year on year, mainly due to higher average temperatures and gas savings prompted by high prices, the company said in its annual report for last year.

– Net4Gas’s financial results between 2015 and 2022 show a cumulative after-tax profit of 27.7 billion crowns. In addition, the company reports financial assets of 6.8 billion crowns, while it has issued bonds worth 18.5 billion crowns and has loans totalling 14.5 billion crowns, maturing between 2025 and 2028.

– Net4Gas’s net profit rose by almost two-thirds year on year last year to 6.24 billion crowns. Revenue increased by a quarter to 12.95 billion crowns. The results improved despite gas transportation falling by around 40 per cent year on year as a result of Russia’s invasion of Ukraine. The company said it responded to geopolitical uncertainty following Russia’s invasion of Ukraine by building up financial reserves, implementing cost-saving measures and temporarily suspending profit distributions to shareholders. According to the group, it employs more than 500 people.

– Experts say the Gazela pipeline helped diversify natural gas supplies to Czechia. Net4Gas invested around ten billion crowns in the pipeline. It began operating in January 2013 and primarily serves as a transit link to the MEGAL transmission system in southern Germany. According to experts, it has been ready from the outset to carry hydrogen through its pipes. The pipeline is 166 kilometres long and runs from Brandov in the Most region to Přimda in the Tachov region.

– At the end of last year, the network operated by the Net4Gas group expanded to include the 85-kilometre Moravia pipeline, which runs between existing distribution hubs in Tvrdonice and Bezměrov in the Zlín Region.

– In September, the Czech state bought RWE Gas Storage through ČEPS for 360 million euros (equivalent to 8.8 billion crowns). The company owned and operated six gas storage facilities, whose capacity is equivalent to one-third of annual consumption.

– The state has also leased part of the capacity at the LNG terminal in Eemshaven, the Netherlands, through energy company ČEZ. The terminal, which began operating last September, handled 21 ships for the Czech Republic during its first year of operation. They carried around two billion cubic metres of gas, equivalent to roughly 27 per cent of last year’s domestic consumption. It was the first liquefied natural gas terminal to come online in Europe since the start of the war in Ukraine. The facility can process up to eight billion cubic metres of gas a year, of which up to three billion are allocated to the Czech Republic—about one-third of the country’s annual consumption. The Czech Republic, or more specifically ČEZ, has leased capacity at the terminal until 2027. In addition to ČEZ, the multinational companies Shell and Engie also use the terminal’s capacity.

– On Wednesday, 27 September, the government tasked the state-owned company ČEPS with buying NET4GAS Holdings.