Exxon Mobil Corporation (NYSE:XOM) and QatarEnergy are reportedly in advanced talks to sell their majority stake in Adriatic LNG, Italy’s largest liquefied natural gas (LNG) import terminal, to Vitol, according to Reuters.

This potential deal could be a significant move for Vitol, as it would give the company a substantial presence in the European LNG market at a time when Italy is seeing an increase in LNG imports.

Adriatic LNG, also known as Terminale GNL Adriatico Srl, is strategically located off the Adriatic coast in northern Italy and is the country’s main LNG import facility. ExxonMobil, through its subsidiary ExxonMobil Italiana Gas, currently holds a 70.7% stake in the terminal. The remaining ownership is divided between a QatarEnergy unit with a 22% stake and the Italian gas grid operator Snam, which owns 7.3%.

The sale is in line with ExxonMobil’s strategy to divest non-core assets and focus on its most profitable ventures. The sale process began last year and attracted interest from several institutional investors and infrastructure funds, including BlackRock, the world’s largest asset manager. Initially, the deal was expected to value Adriatic LNG at around $868 million (800 million euros).

However, as of the end of 2023, BlackRock had exited the discussions, leaving Vitol, through its energy storage arm VTTI, as the leading contender for the acquisition. The financial details of the deal have not been disclosed, but the implications for the stakeholders and the European LNG market are significant.

For Snam, the Italian gas grid operator and a minority shareholder in Adriatic LNG, the deal is a crucial moment. Once the deal is finalized, Snam will have a 45-day window to exercise its right of first refusal, which would allow it to increase its stake in the terminal. Under existing agreements, Snam could potentially raise its share to either 15% or 30%, depending on its strategic interests and financial capacity.

Vitol’s potential acquisition indicates a strategic expansion into the European LNG market, which is becoming increasingly important as Europe seeks to diversify its energy sources. The deal highlights the changing dynamics in the global energy landscape and underscores the strategic importance of LNG as a transitional fuel towards cleaner energy sources.

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