Overview
Eni has enlisted Morgan Stanley to sound out major infrastructure investors such as Apollo, KKR and Stonepeak on a potential financing deal that would be secured by the group's floating liquefied natural gas (FLNG) assets, according to people familiar with the matter. Sources said the discussions are preliminary and that there is no certainty a transaction will be completed.
Structure being discussed
Under one proposal described by the sources, an infrastructure fund would make an initial cash injection into a special purpose vehicle (SPV). That SPV would be entitled to receive payments produced by the FLNG units, effectively linking fund returns to the cashflows generated by the floating facilities. One source said any transaction emerging from these talks would be expected to produce at least one billion euros for Eni.
Representatives for Apollo, Eni, KKR, Morgan Stanley and Stonepeak declined to comment on the discussions.
Context within Eni's strategy
People close to the talks framed the move as consistent with Eni's broader approach of tapping infrastructure investors to unlock capital for new projects. Eni is already planning further investments in floating LNG technology: the company intends to deploy another floating platform in Mozambique in a project that could cost more than $7 billion, and to install two additional floating units in Argentina for state oil company YPF by 2030.
Market backdrop and investor exposure
The potential assets on offer would provide investors with exposure to African gas projects and other geographies outside the Middle East, according to one of the sources. That geographic spread could appeal to investors seeking diversification away from an area still affected by instability connected to the Iran war, which has disrupted supply and heightened competition for LNG cargoes between Europe and Asia on the global market.
Eni's FLNG footprint
Eni has developed operational know-how in so-called floaters, owning three FLNG units that process and liquefy gas from offshore fields in Mozambique and Congo for export. Those existing assets are central to the discussions described by sources, who said the funds would gain access to the payments tied to those units under the SPV arrangement.
Current status and outlook
Sources reiterated the early-stage nature of the contacts and cautioned that there is no guarantee a transaction will be struck. If the talks progress to a completed deal, the arrangement would represent another example of an energy company using project-level cashflows and infrastructure capital to unlock balance-sheet capacity for new developments.