Italian energy giant Eni has tapped Morgan Stanley to structure a financing deal that would bring major investment funds into its floating liquefied natural gas operations, according to three sources with knowledge of the discussions.
Morgan Stanley Orchestrates Capital Hunt
The investment bank is reaching out to prominent private equity firms including Apollo Global Management, KKR, and Stonepeak Infrastructure Partners as potential partners in a transaction built around Eni’s FLNG assets. These floating facilities represent a significant portion of the Italian company’s natural gas liquefaction capacity, allowing production in offshore locations where traditional land-based plants would be impossible or economically unviable.
Morgan Stanley’s involvement signals the deal could reach substantial scale. The bank typically handles transactions exceeding $1 billion, particularly in energy infrastructure where specialized knowledge of asset valuation and regulatory frameworks proves essential. Sources declined to specify the potential transaction size or timeline.
Eni’s floating LNG infrastructure includes vessels that can process natural gas directly at offshore drilling sites, converting it into liquid form for transport to global markets. This technology has become increasingly valuable as energy companies seek to monetize remote gas discoveries that would otherwise remain stranded.
The approach reflects growing appetite among institutional investors for energy infrastructure assets that generate predictable cash flows. Private equity firms have deployed billions into similar deals over the past two years, drawn by long-term contracts and relatively stable operating margins in the LNG sector.
Private Equity Eyes Energy Infrastructure
Apollo, KKR, and Stonepeak each manage funds exceeding $400 billion and have established dedicated energy infrastructure investment teams. Apollo recently completed a $7.1 billion acquisition of Vantage Data Centers, while KKR has invested heavily in renewable energy projects across Europe and North America. Stonepeak focuses specifically on infrastructure assets, including energy storage, transmission lines, and processing facilities.
The timing coincides with renewed investor interest in natural gas assets following Europe’s energy crisis and the global push to reduce coal dependency. LNG demand has surged as countries seek reliable alternatives to pipeline gas, particularly in Asia where economic growth drives energy consumption higher. Floating LNG facilities offer operational flexibility that traditional plants cannot match, able to relocate between gas fields as reserves deplete or new discoveries warrant development.
Eni operates multiple FLNG units across different regions, including facilities off the coasts of Africa and Southeast Asia. These assets typically operate under long-term contracts with gas producers and buyers, providing relatively predictable revenue streams that appeal to infrastructure investors. The floating nature of these facilities also reduces certain regulatory and environmental risks associated with onshore developments.
Industry observers note that similar transactions have valued FLNG assets at multiples of 8-12 times annual earnings, depending on contract duration and operational track record. Recent deals in the sector include TotalEnergies’ partnership with institutional investors for its Mozambique LNG project and Shell’s joint ventures for floating facilities in Australia and Malaysia.
The potential partnership structure could take several forms, from minority stake sales to joint venture arrangements where private equity funds provide capital for expansion while Eni retains operational control. Sources familiar with the discussions emphasized that preliminary conversations are ongoing and no definitive agreement has been reached with any of the targeted investors. The Italian energy company has not publicly commented on the potential transaction, maintaining its standard policy of not discussing market rumors or ongoing business negotiations.
Strategic Shift Toward Partnership Models
European energy companies increasingly pursue partnership structures to fund capital-intensive projects while maintaining operational expertise and market relationships. This approach allows them to reduce balance sheet exposure while accessing the patient capital that infrastructure investors provide for long-cycle energy assets.
The discussions come as Eni faces pressure to optimize its portfolio amid the energy transition, balancing traditional hydrocarbon investments with renewable energy expansion. Will the Italian giant find the right financial partner to unlock value from its floating LNG empire, or will competing priorities among potential investors complicate the deal structure?
