Reuters: Italgas expects DEPA deal to drive earnings as Greece looks to gas

Italgas expects its acquisition of DEPA Infrastructure to drive an earnings increase of up to 10% over the next two years as the Greek gas network expands to help Athens meet climate targets.

“We estimate our earnings per share will grow 5-10% in 2022-2023,” Italgas CEO Paolo Gallo said in a conference call on Thursday.

The deal is also expected to have a positive impact on the Italian group’s dividend.

Earlier this month Greece named Italgas as preferred bidder in a tender for the sale of a majority stake in state-controlled gas distributor DEPA Infrastructure.

The deal, expected to close late this year or early in 2022, included an upfront fee of 733 million euros ($861.86 million).

Speaking to analysts, Gallo said he expected regulated returns on the DEPA network to remain stable since Athens needed significant investments in gas to replace lignite and coal.

“Gas is the only alternative short-term,” he said.

Italgas, one of Europe’s biggest gas distributors, said it would invest around 1.1 billion euros in the DEPA grid to expand it to 11,500 kilometres in 2030 from 6,875 km last year.

The deal is also expected to create additional business opportunities in optic fiber and small-scale LNG development.

Italgas is working to ready its pipelines in Italy to carry biogases in the future and its experience could be transferred to Greece.

“Today gas, tomorrow biomethane and hydrogen,” Gallo said.

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