German energy company RWE has agreed to divest its subsidiary RWE Gas Storage CZ to Czech Republic's state-owned operator of the electric power transmission system ČEPS for about €360m ($390.2m).

RWE Gas Storage is said to be Czech Republic’s largest operator of gas storage facilities. It owns six underground gas storage facilities with a total operating volume of over 2.7 billion m³.

RWE CEO Markus Krebber said: “RWE Gas Storage CZ is a profitable and established company that plays an important role in security of supply in the Czech Republic.”

The sale forms part of RWE's efforts to divest non-core assets.

RWE, however, will retain storage business in Germany including salt caverns, which can be used for storing hydrogen due to their geological characteristics.

ČEPS board chairman Martin Durčák said: “ČEPS, a.s. will finance the purchase in the short term from the surplus of its own resources which results of a significant drop in the costs of ancillary services and the drop in prices of electricity purchased to cover losses in the transmission system. The company will also use proceeds from cross-border capacity auctions.”

Subject to regulatory approval, the transaction is planned for completion in 2023.

Czech Republic Minister of Industry and Trade Josef Síkela said ČEPS is the sole national transmission system operator, which is responsible for the transmission of electricity and the operation of the electricity system.

Síkela added: “The company is wholly owned by the state, with 100% of the ownership rights exercised through the Ministry of Industry and Trade. The purchase of the gas storage facilities by ČEPS is therefore a logical step in government activities to further strengthen the Czech Republic’s security of supply.”