Mero Čr Acquires An Ownership Interest In The TAL Pipeline

abarrelfull wrote on 20 Nov 2012 18:49
Tags: czech europe mero pipeline republic

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Companies MERO ČR, a.s. and Shell Deutschland GmbH are pleased to announce that on the 25th of September 2012 an SPA was signed under which MERO will acquire a 5% share in companies owning and operating The Transalpine Pipeline (TAL). Signing of this contract completes the long-term process of negotiations between the two companies. In accordance with the non-disclosure agreement signed by both parties, no details concerning the contracts (including the price of the transaction and other business terms) will be made public.

By acquiring the shareholdings in TAL companies, MERO has assured energy security for the Czech Republic. The TAL pipeline presents a viable alternative in oil supplies for the Czech Republic and the acquired shareholdings further strengthen this position.

Both parties appreciate high level of professionalism throughout mutual negotiations and declare their readiness for closer cooperation in the future.

MERO ČR will become one of the participants of the TAL pipeline, a joint-venture of major European refineries and oil transporters. MERO has acquired its 5% share from Shell Deutschland Oil GmbH that has a significant shareholding in TAL. The list of participants include - ÖMV, Exxon Mobile, Ruhr Öl, ENI, BP, Conoco Philips, Petroplus and Total. Oil is transported by the pipeline from the Italian marine terminal in Trieste through the Alps to processing plants in Austria and Germany where TAL is connected to the IKL pipeline (Vohburg, Bavaria), which runs to the Central oil tank farm in Nelahozeves.
The successful transaction brings significant advantages:
- enhancement of the energy security of the Czech Republic in the field of oil supply;
- increase of the shareholder value of MERO (the company is 100% owned by the Czech state);
- MERO realizes the purchase without a need of external financing or public funds.
The strategic importance of the IKL-TAL interconnection was proven many times in the past,
especially in situations when the volume of the oil supply to the Czech refineries by the Druzhba pipeline was significantly reduced for various reasons.

In 2008, the Emergency Agreement between MERO and TAL was signed after intensive discussions. This agreement enabled MERO ČR to use the free capacity of the TAL pipeline beyond the level of its long term nominations. Despite the signing, MERO stayed in a position of the so-called “third party” and it was in a less preferred position compared to the TAL shareholders - MERO did not have the flexibility to adjust the amount of the real volume of transported oil based on the current needs or use the free available capacity of the TAL pipeline at any time based on the needs of owners of the Czech refineries.

By becoming the shareholder in the TAL, the position of MERO ČR has significantly improved and in the event of any cut in supply by the Druzhba pipeline the needs of the Czech refineries will be satisfied by the TAL-IKL pipeline based on the free transportation capacity of the TAL pipeline.

“We strive to ensure the energy independence of the Czech Republic. One of the key axes
is a secure supply and storage of oil. In this respect I highly appreciate the fact that through this acquisition the Czech Republic further cemented its diversified oil supply routes via Druzhba pipeline and via the IKL pipeline connected to the Transalpine pipeline TAL,“ said Martin Kuba, the Minister of Industry and Trade.

• Mero Čr Acquires An Ownership Interest In The TAL Pipeline

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