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A consortium of German insurer Allianz and Canadian pension fund Ontario Municipal Employees Retirement System (OMERS) has won the race to buy Net4Gas, the operator of the Czech gas pipeline system, seller RWE announced on March 28. The deal appears a vote of confidence that Russian gas exports to Europe will continue to travel through Ukraine for some time yet.

German utility RWE said in a statement that it has agreed to sell the Czech gas transporter and distributor to Allianz Capital Partners - the investment unit of Europe's largest insurer - and Borealis - OMERS' investment arm - in a deal worth around €1.6bn. Included in the price is around €400m in debt. RWE - for whom the transaction is part of a wider European divestment drive which has now raised €3.3bn - said it expects the deal to close in the second half of the year.

The conservative profile of the winners of the race to buy an asset over which a major question has hung is all the more a surprise given the competition they beat off. Czech groups EPH and KKCG had been seen as favourites in the race for Net4Gas, the sale of which was made trickier by the simmering (for the moment) gas dispute between Russia and Ukraine.

In November, the deadline for binding offers was shifted to February, casting doubt on RWE's chances of attracting the €1.4bn-2.0bn analysts suggested it hoped to recoup for what was the biggest item on its disposals list. The greatest concern is the ongoing strategy by Russia to reroute gas exports from the main overland pipeline through Ukraine to the massive Nord Stream and the planned South Stream pipelines. That plan threatens Net4Gas' major revenue stream, the company earning the biggest chunk of its sales via transiting Russian gas westwards.

In addition, Net4Gas is still awaiting an arbitration ruling on a pricing dispute with Russian gas firm Gazprom, while further uncertainty was cast over the company in December, when RWE was reported to be mulling an exit from the Nabucco pipeline. The EU-backed project is designed to provide an alternative to Russian gas by collecting Azeri supplies at the Turkish border and carrying it to a hub in Austria. Nabucco's competition for the gig is a route across the Balkans to Italy.

Those worries had prompted speculation over the last few months that EPH - which forked out around €2.6bn for a 49% controlling stake in Slovak gas pipeline operator SPP, which is in the same boat as Net4Gas regarding Russian gas flows - could be fronting a bid for Russian interests. Major EPH shareholder Petr Kellner has numerous business interests in Russia, mainly connected to the St Petersburg oligarch circle surrounding ICT group.

There are hints in the media that the Allianz and OMERS consortium had political support. A Czech government official told Reuters ahead of the announcement that Prague would welcome such stable western investors in the country's gas transportation network. "With the sale to Allianz and Borealis... we have succeeded to find a very reliable long-term investor for Net4Gas," RWE Chief Executive Peter Terium said.

The buyers apparently have similar qualities in mind. The deal is the latest in a string of acquisitions in the field of power and gas grids, which are attracting pension funds and insurers due the promise of steady returns amid low bond yields and volatile equities, claims Reuters. Other financial investors, including Australia's Macquarie - which was among the beaten bidders for Net4Gas - and German reinsurer Munich Re, have also started to invest in regulated infrastructure assets, including gas and power grids, and other deals are possible in the sector, the newswire suggests.