-

ENAGÁS, S.A.

"Translation of financial statements originally issued in Spanish and prepared in accordance with accounting principles generally accepted in Spain. In the event of a discrepancy, the Spanish-language version prevails."

BALANCE SHEET AT DECEMBER 31, 20191
INCOME STATEMENT AT DECEMBER 31, 20193
STATEMENT OF RECOGNISED INCOME AND EXPENSES AT DECEMBER 31, 2019 4
STATEMENT OF TOTAL CHANGES IN EQUITY AT DECEMBER 31, 2019 5
CASH FLOW STATEMENT AT DECEMBER 31, 20196
1. Company activities and presentation bases 7 1.1 Company activity 7 1.2 Basis of presentation 8 1.3 Estimates and accounting judgements used 9 1.4 Investments in group and multigroup companies 9 1.5 Dividends distributed and proposed 15 1.6 Commitments and guarantees 16
2. Operational performance of the company 2.1 Operating profit 18 2.2 Trade and other receivables 20 2.3 Trade and other payables 21 2.4 Property, plant, and equipment 22 2.5 Intangible assets 24 2.6 Impairment of non-financial assets 26 2.7 Leases 26 2.8 Provisions and contingent liabilities 27	18
3. Capital structure, financing and financial result 3.1 Equity 30 3.2 Financial debts 31 3.3 Net financial result 33 3.4 Derivative financial instruments 33 3.5 Financial and capital risk management 34 3.6 Cash flows 36	29
4. Other information 4.1 Information on other items on the balance sheet 37 4.2 Tax situation 38 4.3 Related party transactions and balances 42 4.4 Remuneration to the members of the Board of Directors and Senior Management 44 4.5 Other information concerning the Board of Directors 47 4.6 Other Information 47 4.7 Subsequent events 48	37
5. Explanation added for translation to English	49
MANAGEMENT REPORT OF ENAGÁS, S.A.	50

ENAGÁS, S.A. BALANCE SHEET AT DECEMBER 31, 2019

(in thousands of euros)

	Notes	12.31.2019	12.31.2018
NON-CURRENT ASSETS		5,566,359	5,328,700
Intangible assets	2.5	11,937	12,007
Research and development		93	153
IT applications		11,844	11,854
Prepayments and work in progress		-	-
Property, plant, and equipment	2.4	20,605	22,277
Land and buildings		16,161	17,237
Technical facilities and other PP&E		4,286	4,835
Prepayments and work in progress		158	205
Property investments	4.1	19,610	19,610
Land		19,610	19,610
Long-term investments in group and multigroup companies	1.4	5,504,327	5,262,439
Equity instruments		4,692,698	4,459,513
Loans to companies		400,291	400,291
Other financial assets		411,338	402,635
Long-term financial investments		745	752
Loans to third parties		49	56
Other financial assets		696	696
Deferred tax assets	4.2.g	9,135	11,615
CURRENT ASSETS		933,910	753,594
Inventories		6	8
Raw materials and other procurements		6	8
Trade and other receivables	2.2	21,107	16,370
Customer receivables for sales and services rendered		-	10
Customers, Group companies and associates		13,712	13,490
Other receivables		128	123
Personnel		74	291
Current income tax assets		6,760	1,799
Other credits with the Public Administrations		433	657
Short-term investments in group and multigroup companies	1.4	219,551	278,974
Loans to companies		147,551	151,374
Other financial assets		72,000	127,600
Short-term accruals		1,655	1,082
Cash and cash equivalents	3.6.a	691,591	457,160
Treasury		691,591	457,160
TOTAL		6,500,269	6,082,294

The accompanying Notes 1 to 5 constitute an integral part of the Balance Sheet at December 31, 2019.

LIABILITIES	Notes	12.31.2019	12.31.2018
EQUITY		2,656,554	2,133,566
SHAREHOLDERS' EQUITY		2,656,554	2,133,566
Share capital	3.1.a	392,985	358,101
Subscribed capital		392,985	358,101
Issue premium	3.1.b	465,116	-
Issue premium		465,116	-
Reserves		1,557,981	1,552,278
Legal and statutory	3.1.d	71,620	71,620
Other reserves		1,486,361	1,480,658
Treasury shares	3.1.c	(12,464)	(8,219)
Profit/(loss) for the year		403,199	371,222
Interim dividend	1.5.a	(152,469)	(145,917)
Other equity instruments		2,206	6,101
ADJUSTMENTS FOR CHANGES IN VALUE	3.1.e	-	-
Hedging transactions		-	-
NON-CURRENT LIABILITIES		3,612,152	3,694,247
Long-term provisions	2.8.a	1,601	466
Obligations for long-term employee benefits		1,135	-
Other provisions		466	466
Long-term debts	3.2.a	201,243	195,946
Debts with credit institutions		201,136	195,819
Other financial liabilities		107	127
Long-term debts with group companies and associates		3,406,607	3,494,955
Deferred tax liabilities	4.2.g	2,701	2,880
CURRENT LIABILITIES		231,563	254,481
Short-term provisions		-	3,293
Current financial liabilities	3.2.b	9,549	4,897
Debts with credit institutions		5,409	112
Other financial liabilities		4,140	4,785
Short-term debts with group companies and associates	3.2.c	174,942	195,584
Trade and other payables	2.3	47,072	50,707
Suppliers		9,931	11,159
Suppliers, group companies and associates		336	2,185
Personnel		6,814	10,078
Other debts with the Public Administrations		29,991	27,285
TOTAL		6,500,269	6,082,294

The accompanying Notes 1 to 5 constitute an integral part of the Balance Sheet at December 31, 2019.

ENAGÁS, S.A. INCOME STATEMENT AT DECEMBER 31, 2019

(in thousands of euros)
-------------------------	--

	Notes	12.31.2019	12.31.2018
CONTINUING OPERATIONS		457,017	404,630
Revenue	2.1.a	550,787	502,018
Rendering of services		78,787	93,418
Dividend income of group and multigroup companies		472,000	408,600
Work done by the company for its assets	2.4	201	291
Procurements		-	(4)
Consumption of raw materials and other consumables		-	(4)
Other operating income		1,013	1,788
Accessory income and other current management income		1,013	1,788
Personnel expenses	2.1.b	(47,387)	(45,527)
Wages, salaries and similar		(35,519)	(35,035)
Social contributions		(11,868)	(10,492)
Other operating expenses	2.1.c	(39,854)	(46,037)
External services		(39,021)	(44,681)
Taxes		(833)	(1,356)
Amortisation of fixed assets	2.4 and 2.5	(7,647)	(7,899)
Impairment and gains /(losses) on disposal of assets	2.4 and 2.5	(96)	-

OPERATING PROFIT		457,017	404,630
Financial income	3.3	1,020	5,153
From marketable securities and other financial instruments		1,020	5,153
- For debts with group companies and associates		893	3,296
- For debts with third parties		127	1,857
Financial expenses	3.3	(78,515)	(49,809)
For debts with group companies and associates		(68,657)	(35,421)
For debts with third parties		(9,858)	(14,388)
Exchange gains (losses)	3.3 and 4.1.b	278	(1,047)
Impairment and gains (losses) on disposals of financial instruments	1.4.a	(80)	-
Results for disposals and others		(80)	-
FINANCIAL RESULT		(77,297)	(45,703)
PROFIT /(LOSS) BEFORE TAX		379,720	358,927
Income tax	4.2.e	23,479	12,295
PROFIT /(LOSS) FOR THE YEAR FROM CONTINUING OPERATIONS		403,199	371,222
DISCONTINUED OPERATIONS		-	-
PROFIT /(LOSS) FOR THE YEAR		403,199	371,222

The accompanying Notes 1 to 5 constitute an integral part of the Income Statement at December 31, 2019.

ENAGÁS, S.A. STATEMENT OF RECOGNISED INCOME AND EXPENSES AT DECEMBER 31, 2019

(in thousands of euros)

	Notes	12.31.2019	12.31.2018
RESULTS TO THE INCOME STATEMENT		403,199	371,222
INCOME AND EXPENSES RECOGNISED DIRECTLY IN EQUITY		-	195
From cash flow hedges	3.1.e	-	260
Tax effect	3.1.e	-	(65)
AMOUNTS TRANSFERRED TO THE INCOME STATEMENT		-	897
From cash flow hedges	3.1.e	-	1,196
Tax effect	3.1.e	-	(299)
TOTAL RECOGNISED INCOME AND EXPENSES		403,199	372,314

The accompanying Notes 1 to 5 constitute an integral part of the Statement of Recognised Income and Expenses at December 31, 2019.

ENAGÁS, S.A. STATEMENT OF TOTAL CHANGES IN EQUITY AT DECEMBER 31, 2019 (in thousands of euros)

	Note	Share capital	Share premium and reserves	Treasury shares	Profit/(loss) for the year	Interim dividend	Other equity instruments	Adjustments for changes in value	Total Equity
BALANCE ADJUSTED AT THE BEGINNING OF 2018		358,101	1,550,927	(8,219)	349,454	(139,241)	4,165	(1,092)	2,114,095
Total recognised income and expenses		-	-	-	371,222	-	-	1,092	372,314
Transactions with shareholders		-	-	-	(208,862)	(145,917)	-	-	(354,779)
- Capital increases		-	-	-	-	-	-	-	-
- Distribution of dividends	1.5	-	-	-	(208,862)	(145,917)	-	-	(354,779)
Transactions with treasury shares	3.1.c	-	-	-	-	-	-	-	-
Other changes in equity		-	1,351	-	(140,592)	139,241	1,936	-	1,936
- Payments based on equity instruments	3.1.c	-	-	-	-	-	1,936	-	1,936
- Other changes		-	1,351	-	(140,592)	139,241	-		-
BALANCE AT DECEMBER 31, 2018		358,101	1,552,278	(8,219)	371,222	(145,917)	6,101	-	2,133,566
BALANCE ADJUSTED AT THE BEGINNING OF 2019		358,101	1,552,278	(8,219)	371,222	(145,917)	6,101	-	2,133,566
Total recognised income and expenses		-	-	-	403,199	-	-	-	403,199
Transactions with shareholders		34,884	465,116	-	(218,697)	(152,469)	-	-	128,834
- Capital increases	3.1.a and b	34,884	465,116	-	-	-	-	-	500,000
- Distribution of dividends	1.5	-	-	-	(218,697)	(152,469)	-	-	(371,166)
Transactions with treasury shares	3.1.c	-	-	(9,876)	-	-	-	-	(9,876)
Other changes in equity		-	5,703	5,631	(152,525)	145,917	(3,895)	-	831
- Payments based on equity instruments	3.1.c	-	470	5,631	-	-	(3,895)	-	2,206
- Cost of capital increase	3.1.d	-	(1,331)	-	-	-	-	-	(1,331)
- Other changes		-	6,564	-	(152,525)	145,917	-	-	(44)
BALANCE AT DECEMBER 31, 2019		392,985	2,023,097	(12,464)	403,199	(152,469)	2,206	-	2,656,554

The accompanying Notes 1 to 5 constitute an integral part of the Consolidated Statement of Total Changes in Equity at December 31, 2019.

ENAGÁS, S.A. CASH FLOW STATEMENT AT DECEMBER 31, 2019

(in thousands of euros)

	Notes	12.31.2019	12.31.2018
CASH FLOWS FROM OPERATING ACTIVITIES (I)		464,851	496,802
Profit /(loss) for the year before taxes		379,720	358,927
Adjustments to profit		(395,834)	(375,346)
- Amortisation of fixed assets	2.4 and 2.5	7,647	7,899
- Variation of provisions		1,136	(549)
- Attribution of grants		(18)	-
- Gains/losses due to decreases and disposals of assets		92	-
- Financial income and dividends		(483,007)	(433,552)
- Financial expenses	3.3	78,594	49,809
- Other income and expenses		(278)	1,047
Changes in working capital		(9,026)	6,536
- Inventories		1	2
- Trade and other receivables		215	3,357
- Other current assets		(572)	(956)
- Trade and other payables		(4,801)	3,047
- Other current liabilities		(3,868)	1,087
- Other non-current assets and liabilities		(1)	(1)
Other cash flows from operating activities		489,991	506,685
- Interest paid		(69,112)	(42,801)
- Dividends received		527,600	521,000
- Interest received		10,007	17,744
- Income tax paid (received)		21,369	10,742
- Other proceeds		127	-
CASH FLOWS FROM INVESTING ACTIVITIES (II)		(238,639)	31,021
Payments for investments		(388,345)	(18,221)
- Group companies and associates		(381,696)	(10,738)
- Intangible assets and property, plant and equipment	2.4 and 2.5	(6,654)	(7,483)
- Other financial assets		5	-
Proceeds from sale of investments		149,706	49,242
- Group companies and associates		149,706	49,242
CASH FLOWS FROM FINANCING ACTIVITIES (III)		7,916	(123,495)
Proceeds from and payments on equity instruments		492,206	-
- Issue of equity instruments	3.1	500,000	-
- Acquisition of equity instruments		(9,876)	-
- Disposal of equity instruments		2,082	-
Proceeds from and payments on financial liabilities		(113,124)	231,284
- Issue of debts with credit entities		1,656,643	2,324,495
- Issue of debts with group companies and associates		48,000	475,187
- Repayment and amortisation of debts with credit entities		(1,653,100)	(2,372,498)
- Repayment and amortisation of debts with group companies and associates		(164,667)	(195,900)
Dividends paid and remuneration on other equity instruments		(371,166)	(354,779)
- Dividends	1.5	(371,166)	(354,779)
EFFECT OF EXCHANGE RATE FLUCTUATIONS (IV)		303	(297)
NET INCREASE/DECREASE IN CASH AND EQUIVALENTS (I + II + III + IV)		234,431	404,031
Cash and cash equivalents at beginning of the year		457,160	53,129
Cash and cash equivalents at year-end		691,591	457,160

The accompanying Notes 1 to 5 constitute an integral part of the Cash Flow Statement at December 31, 2019.

1. Company activities and presentation bases

Relevant aspects

Results

Net profit attributed to the Company increased by 8.6% with respect to 2018, amounting to 403.2 million euros.
Net earnings per share amounted to 1.688 euros per share as compared to 1.557 euros per share in 2018.
The proposed dividend payment per share for 2019 amounts to 1.60 euros per share (1.53 euros per share in 2018) (Note 1.5).
The Board of Directors proposed the following appropriation of net profit corresponding to 2019 for the Parent, Enagás, S.A. (Note 1.5):

Positive working capital

At December 31, 2019, the Balance Sheet records a positive working capital of 702 million euros.

Investments in group and multigroup companies

At December 31, 2019, Enagás S.A. held financial instruments through which it develops some of its activities, both in current and non-current assets on the attached Balance Sheet, in the total amount of 5,724 million euros. The breakdown of these investments is as follows:

Equity instruments in the amount of 4,693 million euros (Note 1.4.a).
Loans to companies in the amount of 548 million euros (Note 1.4).
Other financial assets in the amount of 483 million euros (Note 1.4).

Gasoducto Sur Peruano, S.A. ("GSP")

With respect to the situation arising in connection with the investment in GSP as a consequence of the termination of the concession agreement on January 24, 2017, there is currently a disagreement between the Peruvian authorities and Enagás with respect to applying the investment recovery mechanism established in the GSP concession contract. This entailed the beginning of an international arbitration by virtue of the Reciprocal Investment Promotion and Protection Agreement (hereinafter 'APPRI') between Spain and Peru as indicated in Note 1.4.c presented to the International Centre for Settlement of Investment Disputes (hereinafter 'ICSID') on July 2, 2018. On January 20, 2020, Enagás filed its statement of claim with the ICSID, and the Peruvian State began the phase of response.
At December 31, 2019, the total amount registered in the balance sheet amounted to 411,338 thousands of euros, relating to both the recovery of the financial investment in this company and the credit rights associated with the recovery of the guarantees against the Company as a result of the termination of the concession contract in GSP. (Note 1.4.c).

Guarantees

At December 31, 2019 Enagás S.A. had granted guarantees amounting to 5,064 million euros (Note 1.6).

1.1 Company activity

Enagás, S.A, a company incorporated in Spain on July 13, 1972 in accordance with the Corporate Enterprises Act, is the parent company of a group of entities including interests in subsidiaries, associated companies, joint operations and joint ventures, which are engaged in various activities and, together with Enagás, S.A., the Enagás Group (hereinafter the Group), with corporate purpose of the transmission, storage and regasification of natural gas, as well as all related functions with the technical management of the gas system.

a) Corporate purpose

i. Regasification, basic and secondary transmission as well as storage of natural gas, via the corresponding gas infrastructure or installations, of its own or of third parties, and also the performance of auxiliary activities or others related to the aforementioned activities.

ii. Design, construction, start up, exploitation, operation, and maintenance of all types of complementary gas infrastructure and facilities, including telecommunications networks, remote control and control of any nature, and electricity networks, whether its own or of third parties.
iii. Development of all functions relating to technical management of the gas system.
iv. Transmission and storage activities for carbon dioxide, hydrogen, biogas, and other energy-related fluids, via the corresponding facilities, of its own or of third parties, as well as the design, construction, start up, exploitation, operation, and maintenance of all types of complementary infrastructure and installations necessary for said activities.
v. Activities for making use of heat, cold, and energies associated with its main activities or arising from them.
vi. Rendering of services of a diverse nature, among them, engineering, construction, advisory, and consultancy services in connection with the activities relating to its corporate purpose as well as participation in natural gas markets management activities to the extent they are compatible with the activities permitted for the Company by law.

The above activities can be carried out by Enagás, S.A. itself or through companies with an identical or analogous corporate purpose in which it holds interest, provided they remain within the scope and limitations established by legislation applicable to the hydrocarbons sector. In accordance with said legislation, the activities related to transmission and technical management of the system which are of a regulated nature must be carried out by two subsidiaries entirely owned by Enagás, S.A. (Enagás Transporte, S.A.U. and Enagás GTS,

1.2 Basis of presentation

These Annual Accounts have been prepared by the Directors in accordance with the financial information regulatory framework applicable to the Company, which is established in:

i. Commercial Code and remaining mercantile legislation.
ii. Spanish National Charts of Accounts enacted by Royal Decree 1514/2007 of November 16, modified in 2016 by Royal Decree 602/2016 of December 2, and prevailing mercantile law.
iii. Compulsory regulations approved by the Accounting and Audit Institute, in development of the National Charts of Accounts and its complementary standards.
iv. The other Spanish accounting regulations to be applied.

With regard to the Resolution of March 5, 2019 of the Accounting and Audit Institute, which implements the criteria for the presentation of financial instruments and other accounting aspects related to the commercial regulation of corporate enterprises, applicable for the years beginning on or after January 1, 2020, the company has not decided to apply it in advance.

In addition, no non-compulsory accounting principles have been applied.

Also, the Directors authorised these Annual Accounts for issue in due consideration of all compulsory accounting principles and standards with a significant effect on the Annual Accounts.

S.A.U., respectively). Consequently, the corporate purpose includes:

vii. Management of the corporate group comprised of the interest held in share capital of companies belonging to the group.
viii. Rendering of assistance or support services to affiliates, including the provision of appropriate guarantees and reinforcement for them.

b) Other information

Its registered address is located at Paseo de los Olmos, 19, 28005, Madrid. At its website www.enagas.es and at its registered address, its Articles of Association and other public information on the Company and its Group can be consulted.

In addition to the operations carried out directly, Enagás, S.A., as the parent company of the Enagás Group and in accordance with current legislation, is obliged to separately prepare consolidated accounts of the Group, which also include interests in subsidiaries, associates, joint operations and joint ventures.

The main figures of the consolidated Annual Accounts of the Enagás Group for 2019 and 2018 are the following:

	12.31.2019	12.31.2018
Total assets	8,844,224	9,526,202
Equity	3,168,849	3,039,371
Revenue	1,153,103	1,294,660
Net profit /(loss)	422,618	442,626

The Annual Accounts of Enagás, S.A. and its Consolidated Group for financial year 2019 were prepared by its Directors at the Board of Directors meeting held on February 17, 2020. The 2018 Annual Accounts of Enagás S.A. and its consolidated Group were approved at the Enagás, S.A. General Shareholders' Meeting held on March 29, 2019 and duly filed at the Madrid Mercantile Registry.

These Annual Accounts are presented in thousands of euros (unless otherwise stated).

a) Materiality criteria

The accompanying Annual Accounts do not include the information or disclosures which the Group did not consider of material significance or important relative to the concept of materiality as defined in the conceptual framework of the National Charts of Accounts, taking into account the Annual Accounts as a whole.

b) True and fair view

The accompanying Annual Accounts, which were obtained from the Company's accounting records, are presented in accordance with the regulatory financial reporting framework applicable to the Company and, in particular, with the accounting principles and criteria set out therein and, accordingly, provide a true and fair view of the Company's equity, financial position, results of operations, the statement of changes in equity and cash flows during the year. These Annual Accounts have been prepared by the Directors of the Company and will be submitted for approval by the General Shareholders' Meeting. It is expected that they will be approved without modification.

c) Comparison of information

The information included in these Notes relating to 2018 is presented solely and exclusively for purposes of comparison with the information relating to 2019.

d) Grouping of items

Certain items on the Balance Sheet, the Income Statement, the Statement of Changes in Equity and Cash Flow Statement are

1.3 Estimates and accounting judgements used

The results and determination of assets and liabilities disclosed in the Annual Accounts are sensitive to the accounting principles and policies, measurement bases and estimates used by the Company's Directors.

In the 2019 Annual Accounts, the Company's Senior Management have occasionally used estimates, subsequently ratified by the Directors, in order to quantify certain assets, liabilities, income, expenses and commitments recognised therein. These estimates basically relate to the following:

The useful life of intangible assets and PP&E (Notes 2.4 and 2.5).
The measurement of assets to determine the possible existence of impairment losses (Note 2.6).
Provisions of invoices pending of formalisation (Notes 2.2 and 2.3).
The calculation of provisions and contingencies (Note 2.8).
The calculation of income tax and deferred tax assets (Note 4.2).
The market value of certain financial instruments (Note 3.4).

grouped together to make them easier to understand, although when individual data is significant, specific information has been included in the respective Notes to these annual accounts.

e) Changes in accounting policies

In 2019 there were no significant changes in accounting policies with respect to those applied in 2018.

• The fair value of equity instruments granted under the Long-Term Incentive Plan ("ILP") (Note 4.4).

Although these estimates were made on the basis of the best information available at December 31, 2019 regarding the facts analysed, it is possible that future events may require these to be modified (upwards or downwards) in the years ahead. This would be carried out prospectively, recognising the effects of the changes to accounting estimates in the Annual Accounts.

During the twelve-month period ended December 31, 2019, there were no significant changes to the estimates made at 2018 yearend, and thus future periods are also not expected to be affected.

1.4 Investments in group and multigroup companies

Accounting policies

Equity instruments

• Investments in equity of group and multigroup companies are measured at cost, less, where applicable, any accumulated impairment losses. Said impairment losses are calculated as the difference between an asset's carrying amount and its recoverable amount, understood as being either fair value less cost of sale or the present value of future cash flows arising from the investment, whichever is greater.

In the absence of better evidence of a recoverable amount, the equity of the affiliate is taken into account, after adjusting for any unreleased gains at the date of measurement.

Credits and receivables

• This heading comprises financial assets arising from the sale of goods or the rendering of services in the course of the Company's business, or financial assets which, not having commercial substance,

are not equity instruments or derivatives with fixed or determinable payments and are not traded in an active market.

Significant estimates and judgements

At the closure of each financial year, or when there are indications of loss of value, the Company analyses the recoverability of the equity investments in group and multigroup companies, in order to verify that the recoverable amount of these investments is greater than the value recognised in the Company's accounting records.
In order to calculate the recoverable amount of the Group companies, an analysis of the updated cash flows is prepared, based on detailed future projections for these investments.
With regard to the impairment analysis relating to group and multigroup companies, the net profit discount rate applied to Spanish companies in 2019 was between 4% and 8% in according to business that it is allocated to. Investments in international companies ranges from 6.44% to 8.40%, after-tax rates, depending on the business and the country in which they operate. Both intervals correspond to both the 2019 and 2018 rates. The sensitivity analysis of the discount rate of 0.5% and -0.5% carried out at 2019 year-end indicates that the Company shows no sign of significant risks associated with potential reasonable variations. Thus, the Company's Management considers that, within the specified ranges, there would be no changes in the impairment calculation.

The breakdown of accounts under the heading "Investments in group and multigroup companies", both short- and long-term at year-end 2019 and 2018 is as follows:

	2019	2018
Long-term financial instruments	5,504,327	5,262,439
Equity investments in group and multigroup companies (Note 1.4.a)	4,692,698	4,459,513
Credits and receivables	811,629	802,926
Loans to group companies (Note 1.4.b)	400,291	400,291
Other financial assets (Note 1.4.c)	411,338	402,635
Short-term financial instruments	219,551	278,974
Credits and receivables (Note 1.4.b)	7,246	7,266
Credits to group companies for tax effect (1)	140,305	144,108
Dividends receivable (2)	72,000	127,600

(1) As mentioned in Note 4.2.b, Enagás S.A. is the parent company of Tax Consolidation Group 493/12 for corporate income tax, and this amount matches the accounts receivable from the different companies belonging to the group in respect of their contribution to the group's taxable income.

(2) This amount relates to the dividends receivable at December 31, 2019 which were distributed by Enagás Transporte, S.A.U. in 2019 (Note 2.1.a).

a) Equity instruments

		% Stake	Thousands of euros
Name / Address /				Result						Carrying amount
Activity	Direct	Indirect	Share capital	Operating income	Net	Remaining Equity	Total Equity	Dividends Received	Cost	Accumulated impairment	Total
2019									4,692,778	(80)	4,692,698
Enagás Transporte, S.A.U.	100	-	532,089	506,986	441,013	3,232,780	4,205,882	432,000	3,670,527	-	3,670,527
Enagás GTS, S.A.U.	100	-	5,914	2,628	1,941	(37)	7,818	-	33,932	-	33,932
Enagás Financiaciones, S.A.U.	100	-	15,189	35,670	15,189	5,292	35,670	-	8,227	-	8,227
Enagás Internacional, S.L.U.	100	-	136,308	53,454	34,645	909,251	1,080,204	40,000	945,710	-	945,710
Estación de Compresión Soto la Marina, S.A.P.I. de C.V.	49	1	12,081	4,555	2,564	3,465	18,110	-	8,222	-	8,222
Enagás Perú SAC	1	99	3,894	(367)	(2,012)	(363)	1,519	-	1	(1)	-
Enagás México SA de CV	1	99	2,890	(443)	(458)	(1,852)	580	-	79	(79)	-
Enagás Emprende, S.L.U.	100	-	4,882	(1,927)	(1,676)	10,406	13,612	-	16,274	-	16,274
Enagás Services Solutions, S.L.U.	100	-	2,894	(738)	(555)	5,639	7,978	-	9,673	-	9,673
Mibgas Derivatives, S.A.	19	9	757	-	-	(757)	-	-	97	-	97
Enagás Renovable, S.L.	100	-	36	-	-	(1)	35	-	36	-	36
2018									4,459,513	-	4,459,513
Enagás Transporte, S.A.U.	100	-	532,089	518,286	397,729	1,566,299	2,496,117	387,600	3,815,407	-	3,815,407
Enagás GTS, S.A.U.	100	-	5,914	1,705	1,160	(1,350)	5,725	-	33,838	-	33,838
Enagás Financiaciones, S.A.U.	100	-	890	63,857	6,299	12,291	19,480	-	8,213	-	8,213
Enagás Internacional, S.L.U.	100	-	99,508	95,534	83,431	530,885	713,824	11,000	578,070	-	578,070
Estación de Compresión Soto la Marina, S.A.P.I. de C.V.	50	-	21,881	5,701	5,701	22,111	49,693	-	12,248	-	12,248
Enagás Perú SAC	1	99	6,474	(730)	(990)	(943)	4,540	-	1	-	1
Enagás México SA de C.V.	1	99	2,313	(346)	(364)	(1,455)	494	-	-	-	-
Enagás Emprende, S.L.U.	100	-	2,008	(1,270)	(954)	4,654	5,708	-	6,694	-	6,694
Enagás Services Solutions, S.L.U.	100	-	1,484	1,518	(1,139)	3,460	3,805	-	4,945	-	4,945
Mibgas Derivatives, S.A.	19	9	757	-	-	-	757	-	97	-	97

These Group companies are not listed on the Securities Markets.

In 2019 the following changes were made to the Company's equity instruments:

As a result of the approval of a second cycle of the Long-Term Incentive Plan ("ILP") on March 29, 2019 at the General Shareholders' Meeting of Enagás, S.A. and of the regularisation of the previous Plan (Note 4.4), in accordance with BOICAC No. 75/2008, query No. 7, the Company increased the value of the equity instruments of each of the subsidiaries with beneficiaries assigned to the Plan, i.e. Enagás Transporte, S.A.U., Enagás GTS, S.A.U., Enagás Financiaciones, S.A.U., Enagás Internacional, S.L.U., Enagás México, S.A. de C.V. and Enagás Services Solutions, S.L.U., by a total of 428 thousands of euros in 2019 (392 thousands of euros in 2018 relating to the aforementioned Long-Term Incentive Plan). The counterparty of this contribution is included under the heading "Other equity instruments" of the net equity of the balance sheet at December 31, 2019, as a result of the cost assumed by the Company in each of the aforementioned subsidiaries.
On March 4, 2019, the Company carried out a capital increase in Enagás Internacional, S.L.U. amounting to 20,000 thousands of euros with a share premium of 180,000 thousands of euros through a monetary contribution. This capital increase represented the issue of 20,000,000 shares.

Likewise, on March 6, 2019, Enagás Internacional, S.L.U. carried out a further capital increase of 500 thousands of euros with a share premium of 4,368 thousands of euros through a monetary contribution. This capital increase represented the issue of 500,000 new shares.

On May 6, 2019, the Company carried out a capital increase in Enagás Internacional, S.L.U. amounting to 5,500 thousands of euros with a share premium of 49,500 thousands of euros through a monetary contribution. This capital increase represented the issue of 5,500,000 new shares.

Finally, on July 25, 2019, Enagás Internacional S.L.U. carried out a capital increase of 10,800 thousands of euros with a share premium of 96,879 thousands of euros through a monetary contribution. This capital increase represented the issue of 10,800,000 shares.

The capital increases carried out in 2019 in Enagás Internacional, S.L.U. were performed mainly in order to finance the purchase of shareholding in the US company Tallgrass through certain subsidiaries in which Enagás Internacional, S.L.U. holds an interest.

• On March 7, 2019, the Company increased capital in Enagás Services Solutions, S.L.U. for 3,700 thousands of euros, of which 1,110 thousands of euros were contributed as shares and 2,590 thousands of euros as a share premium on said shares.

Additionally at July 2, 2019, Enagás Services Solutions, S.L.U. performed a capital increase by issuing 300,000 shares with a face value of one euro each, with a total share premium of 700 thousands of euros.

• On January 30, 2019 and March 26, 2019, Enagás Emprende, S.L.U. carried out two capital increases for the same amount, by issuing a total of 1,380,000 new shares, with a face value of one euro each, and a total share premium of 3,220 thousands of euros, through a fully paid-up monetary contribution in each of the increases.

Additionally at July 12, 2019, Enagás Emprende, S.L.U. performed a capital increase by issuing 294,000 new shares with a face value of one euro each, with a total share premium of 686 thousands of euros.

Lastly, on November 12, 2019 and December 4, 2019, Enagás Emprende, S.L.U. again increased capital by 2,300 thousands of euros and 1,700 thousands of euros, respectively, of which 1,200 thousands of euros were contributed in the form of shares with a face value of one euro each and 2,800 thousands of euros in the form of the associated share premium.

• On July 25, 2019 and October 16, 2019, Enagás Transporte, S.A.U. returned to the Company "other contributions from partners" amounting to 145,000 thousands of euros.

On November 8, 2019, Enagás Renovable, S.L.U. was incorporated for an amount of 36 thousands of euros through the creation of 36,000 fully paid-up shares with a face value of one euro each.
On December 26, 2019, Estación de Compresión Soto La Marina, S.A.P.I de C.V. performed a capital reduction by returning contributions to the partners. Consequently, the Company reduced its ownership interest in Estación de Compresión Soto la Marina S.A.P.I de C.V. by 4,027 thousands of euros.

It should be noted that on April 16, 2019, the merger by absorption of the companies Estación de Compresión Soto La Marina, S.A.P.I. de C.V., as the merging company, and Estación de Compresión Soto La Marina EPC, S.A.P.I. de C.V., as the merged company, took place. This merger had no impact on Enagás, S.A.'s investment in Soto La Marina, S.A.P.I. de C.V.

At December 31, 2019 the Company made an impairment adjustment to the value of its investment in Enagás México amounting to 79 thousands of euros. At December 31, 2018, the Company had not made any impairment adjustments to the value of direct investments in Group companies.

b) Loans to companies

	Long-term balances		Short-term balances
	2019	2018	2019	2018
Enagás Internacional, S.L.U.	400,291	400,291	7,246	7,266
Total	400,291	400,291	7,246	7,266

The balances at December 31, 2019 and December 31, 2018 with loans to group companies relate in full to a loan granted to Enagás Internacional, S.L.U. amounting to 400,291 thousands of euros and the interest associated with this loan, which was accrued but not paid, amounting to 7,246 thousands of euros (7,266 thousands of euros at December 31, 2018).

Loans to group companies are subject to the market interest rate, with the average rate for 2019 and 2018 being 2.5% and 1.4% respectively.

The breakdown per maturity of these loans at year-end 2019 and 2018 is as follows:

2019	2020	2021	2022	2023	2024 and later years	Total
Loans and receivables	7,246	-	400,291	-	-	407,537
Total	7,246	-	400,291	-	-	407,537

2018	2019	2020	2021	2022	2023 and later years	Total

Loans and receivables	7,266	-	-	400,291	-	407,557

c) Other financial assets

The "Other financial assets" heading includes the different accounts receivable from the investment in Gasoducto Sur Peruano, S.A. (hereinafter "GSP"), a company directly owned by Enagás Internacional, S.L.U. In relation to this investment, on January 24, 2017, the Directorate General of Hydrocarbons of the Peruvian Government's Ministry of Energy and Mines (hereinafter the "State of Peru") sent an official letter to GSP stating "the termination of the concession agreement owing to causes attributable to the concession holder", in accordance with the terms of Clause 6.7 of the "Improvements to the Energy Security of the Country and the Development of the Gasoducto Sur Peruano" (hereinafter "the Project") concession agreement, because the financial close had not been evidenced within the period established in the agreement (January 23, 2017), and proceeded to the immediate enforcement of the totality of the

guarantee for full compliance given by GSP (262,5 million dollars), to ensure fulfilment of the obligations relating to the concession, which in the case of Enagás generated a payment of 65.6 million dollars. Also in January 2017, they paid bank financing sureties (regarding GSP) to Enagás amounting to 162 million dollars, including both principal and interest pending payment. In December 2017, the process for delivering the Concession Assets held by GSP was substantially completed with the Peruvian State assuming control over them.

As a result of the termination of the concession contract, based on the opinion of the external and internal legal advisors of Enagás, the Peruvian State had the obligation to apply Clause 20 of the Concession Contract, calculating the Net Carrying Amount (hereinafter NCA) of the Concession Assets, calling a maximum of

three auctions to award the Concession, with the auction result being to pay GSP the NCA, based on the opinion of the external and internal legal advisors of Enagás. With the amount that GSP would have received for the NCA of the Concession Assets, it would have been able to settle its obligations to third parties and, if possible, reimburse the capital contributions made by its shareholders, as explained in the 2016 and 2017 Annual Accounts of Enagás, S.A.

As a result of inaction by the Peruvian State in relation to the aforementioned procedure, on December 19, 2017, Enagás notified the Peruvian State about the existence of a dispute relating to the investment in GSP with a view to reaching an amicable agreement on the terms of Article 9.1 of the Agreement for the Reciprocal Promotion and Protection of APPRI in Spanish signed by the Republic of Peru and the Kingdom of Spain. This notification represented the beginning of the six-month period for direct contact prior to initiating international arbitration in which the APPRI acts as the mechanism for recovering the investment in GSP.

Once the required six months of direct contact between Enagás and the Peruvian State had elapsed without reaching an amicable settlement of this dispute, on July 2, 2018, an application for the initiation of arbitration against the Peruvian State regarding its investment in GSP was filed by Enagás with the ICSID.

Through this arbitration procedure, it is expected that the Peruvian State will reimburse Enagás for its investment in GSP, this being the mechanism by which the financial assets recorded in the balance sheet would be recovered. Thus, it is expected that the Arbitration Court that hears the arbitration procedure at the ICSID will uphold with the arguments of Enagás, issuing an award recognising that the Peruvian State has not protected Enagás investment under the APPRI and, therefore, it must compensate it by paying the value of that investment.

With respect to this ICSID arbitration procedure, the arbitration tribunal was constituted on July 18, 2019, and on September 24, 2019 Resolution No. 1 was issued, establishing the procedural rules that will govern the arbitration procedure until the award is handed down. At present, the procedure is in the phase of preparation of written and oral proceedings before said tribunal, and Enagás' statement of claim was presented on January 20, 2020, at which time the phase of response by the Peruvian State has begun being the maximum deadline for completion of this phase of response by the end of May 2020.

In addition, also with the ICSID, it should be noted that on January 21, 2020, Odebrecht filed the arbitration claim against the Republic of Peru in order to recover its investment in GSP.

Regarding the Enagás' statement of claim, the main argument maintained by Enagás is that, if the Peruvian State had complied with its obligation under the Concession Contract, it would have calculated the NCA and organised the three auctions, which it was obliged to do, to award the Concession, and the proceeds of the auction would have been delivered to GSP, which would have applied the amount delivered to pay its creditors and return the capital to its shareholders. The claim by Enagás is based on the collection of the 100% of the NCA, from the Peruvian government, as on January 24, 2018, a year had transpired since the termination of the concession agreement, without any announcement of auctions. The absence of an auction means that the legal advisors of Enagás believe that it should be considered that GSP would have received 100% of the NCA because it was deprived of the possibility of receiving it when at least one of the auctions were not convened. Therefore, starting from the NCA considered, a certain payments waterfall would have been applied. Enagás considers that, taking into account the NCA of the Concession Assets determined by an independent expert, and also taking into account the payment waterfall as per the terms of the insolvency legislation, as well as the contracts between Enagás and the members and creditors of GSP relating to subordination and credit agreements, if the State had fulfilled their obligations, and thus paid GSP the amount collected in the auction, Enagás would have recovered its investment.

There have been no changes in the amount of the NCA maintaining at December 31, 2019 the valuation made by a firm of independent experts hired by Enagás which its NCA total value amounts to 1,980 million dollars.

Taking into account this updated NCA, if the payment waterfall were to be applied to it as per the terms of the insolvency laws, the subordination and the assignment of credit agreements entered into by Enagás and its partners in GSP, Enagás would recover the total value of its investment claim with the ICSID in the amount of 511 million dollars.

In relation to the aforementioned contracts of subordination of rights and assignment of claims, their effectiveness and form of application has been successively questioned by Enagás' partners in GSP through different arbitration proceedings. The arbitration proceedings filed by Graña y Montero questioning the legitimacy of Enagás to claim its claims against GSP are still pending. Likewise, the INDECOPI authority has recognised the full effectiveness of the aforementioned agreements in GSP's bankruptcy process. In relation to this arbitration procedure, the company's Peruvian legal advisors consider that the possibility that such arbitration procedure will conclude with a negative result for Enagás is remote, considering such agreements to be fully valid and applicable.

As regards the arbitration proceedings against the State of Peru, based on the conclusions determined by the external and internal legal advisers of Enagás, the recoverability of the totality of the Enagás investment in GSP, consisting of receivables in relation to the aforementioned enforced guarantees to the total of 226.8 million dollars, interests of 1.8 million dollars, various invoices for professional services provided to the amount of 7.6 million dollars and the share capital contributed to GSP for the amount of 275.3 million dollars, is considered likely.

With regard to the recovery periods, assessing the time taken to resolve a dispute of this complexity in an international arbitration as well as the periods considered in the aforementioned ICSID Resolution No. 1, December 31, 2022 is maintained as the estimated date for obtaining an award favourable to Enagás' interests. The corresponding financial discounting is recorded for the three years up to that estimated recovery date as detailed in Note 3.3.

Based on this, the amounts outlined in the preceding paragraph are recorded at their updated value in the Balance Sheet dated December 31, 2019 for a total amount of 411,338 thousands of euros (402,635 thousands of euros at December 31, 2018).

Other related matters

On March 12, 2018, Law No. 30737 was published "guaranteeing immediate payment to the Peruvian government to repair civil damage caused by corruption and related crimes". On May 9, 2018, Supreme Decree 096-2018-EF was published, enacting the regulations of the aforementioned law.

In accordance with Article 9 of Law No. 30737, legal persons and legal entities in the form of partnerships, consortiums and joint ventures who may have benefited from the awarding of contracts, or subsequent to it, jointly with persons who have been convicted or who may have acknowledged having committed crimes against the public administration, asset laundering or related crimes, or their equivalents against the State of Peru, in Peru or abroad are classified as Category 2, and therefore fall within its scope of application.

In June 2019, the Peruvian Judiciary approved the Effective Partnership Agreement reached between the Odebrecht Group and the Peruvian Public Prosecutor's Office, and the GSP project was not included as one of the projects affected by corruption-related events. Subsequently, on October 14, 2019, Enagás Internacional received notification from the Peruvian Public Prosecutor's Office informing it of the existence of an extension of this effective partnership agreement with Odebrecht, in which it would be acknowledging that it had made illegal payments - according to the Public Prosecutor's Office - with respect to the GSP project, although there are still no facts known or consistent or proven links between GSP and corruption.

Notwithstanding the above comments on the extension of the initial Effective Collaboration Agreement signed by Odebrecht and the Public Prosecutor of Peru, there have been no new developments to date regarding the actions of the Peruvian Public Prosecutor's Office on the investigation of Odebrecht's activities in Peru and other investigations carried out by various bodies of the Peruvian Prosecutor's Office for alleged crimes that could somehow be related to the awarding of the project "Improvements to the country's energy security and development of the Southern Peru Gas Pipeline", and the situation described in Note 1.4.c of the Annual Accounts of Enagás, S.A. for fiscal year 2018, has been maintained. In this regard, two investigations are known to be in progress:

• The first one signed with Folder 321-2014, related to aggravated collusion between a former Odebrecht employee and a public official, whose control and clean-up phase has been resumed on June 28, 2019, after the Supreme Court rejected the request of the Ad Hoc Attorney's Office of Peru to include one of Odebrecht's subsidiaries as a civil third party. At this stage it is expected that a decision on the opening of the oral proceedings will be taken.

Based on the opinions of Enagás external legal advisors for the Peruvian criminal code, the possibility of sentencing Odebrecht's former employee is considered to be remote. In this same case, the preparatory investigative court has declared the incorporation of GSP as a liable third party as wrongful.

• The second investigation opened is in the preliminary stage at the public prosecutor's office, signed with Folder 12-2017, with an Enagás employee amongst those being investigated, as well as on July 17, 2019 the communication of the inclusion of Enagás Internacional, S.L.U. as being under investigation was received.

Based on the opinion of our external legal advisors in Peruvian criminal law, it is maintained that to date there is no indication that the investigations could be detrimental to Enagás.

Even without evidence of a criminal conviction or a confession of the commission of crimes, as required under Article 9 of Law No. 30737, on June 28, 2018, the State of Peru classified Enagás Internacional on the "List of Contracts and Subjects of Category 2 indicating the legal person or legal entity included under Section II of Law No. 30737" in relation to the concession contract awarded to GSP. The application of the mentioned standard involves different measures such as setting up an escrow account, reporting information, the limitation of transfers to other countries or the preparation of a compliance programme.

The total amount of the Trust, estimated at 50% of the total average net equity, corresponding to its participation in GSP, confirmed with the Ministry of Justice, amounts to 65.5 million dollars. At present, once the trust agreement with the banks has been executed, it is submitted to the Ministry of Justice of Peru in accordance with the established terms, pending its approval.

Moreover, Law No. 30737 also imposes a ban on companies included on the list from making transfers outside of Peru, which, based on the conclusions of the external and internal legal advisers, would only be applicable to investment in GSP, notwithstanding a restriction on dividends to pay for the COGA and TGP societies, also considering that investment in the latter is protected by the Legal Stability Agreement in Peru. It should be noted that Enagás, S.A. holds an indirect stake in these companies through its holding in Enagás Internacional, S.L.U.

In light of the above, the Enagás Group believes that these regulations do not have a negative effect on the recovery of accounts receivable through the international arbitration process indicated above.

Based on all of the above, the directors of Enagás, in line with the opinion of their external and internal legal advisers, and of an independent expert and independent expert accountant, consider these facts to have no bearing on the estimation for recovery of the investment in the stake in GSP and the previously mentioned receivables to the amount of 411,338 thousands of euros (402,635 thousands of euros at December 31, 2018).

1.5 Dividends distributed and proposed

a) Proposed distribution of profit attributable to the company

The appropriation of 2019 profit corresponding to the Company proposed by the Board of Directors and which will be submitted for approval by the General Shareholders' Meeting is as follows:

	12.31.2019
Dividend	396,222
Legal reserve	6,977
TOTAL	403,199

At a meeting held on December 16, 2019, the Board of Directors of Enagás, S.A. agreed to distribute an interim dividend charged against 2019 profit, based on the necessary liquidity statement, expressed in thousands of euros, amounting to 152,469 thousands of euros (0.64 euros gross per share), in accordance with Article 277 of the Spanish Corporate Enterprises Act.

Likewise, it was agreed to set up a legal reserve amounting to 6,977 thousands of euros, representing 20% of share capital, in accordance with the Corporate Enterprises Act, which stipulates that 10% of profit for the year must be transferred to the legal reserve until it represents at least 20% of share capital (Note 3.1.d).

The provisional accounting records prepared by the Company, in accordance with legal requirements and which presented balances sufficient for the distribution of the interim dividend in 2019, were as follows:

Provisional accounting statement at November 30, 2019
Net accounting result	13,488
10% legal reserve	-
Interim dividend received from Group companies	392,000
Profit "available" for distribution	405,488
Forecast payment on account	(152,469)
Forecast cash balance for the period from November 30 to December 31:
Cash balance	28,719

Projected collection for the period considered	325,712
Credit lines and loans available from financial institutions	1,500,000
Payments projected for the period under consideration (including the payment on account)	(216,822)

The aforementioned interim dividend was paid on December 23, 2019.

In addition to the proposed distribution of profit for 2019, it is proposed that a dividend of 7,757 thousands of euros be paid out of voluntary reserves, bringing the total gross dividend proposed to 0.96 euros per share.

The dividend is subject to approval by the ordinary General Shareholders' Meeting and is not included as a liability in these Annual Accounts. Thus, this gross complementary dividend will total up to a maximum amount of 251,510 thousands of euros.

b) Total dividends paid

In addition to the aforementioned interim dividend for 2019, during 2019 Enagás, S.A. distributed the gross complementary dividend for 2018.

This dividend amounted to 218,697 thousands of euros (0.918 euros per share) and was paid on July 3, 2019.

1.6 Commitments and guarantees

Accounting policies

A financial guarantee contract is a contract which requires that the issuer makes specific payments to repay the holder for losses incurred when a specific debtor does not fulfil payment obligations at maturity, in accordance with the original or modified conditions of a debt instrument. The rights and obligations associated with a financial guarantee will be considered as financial assets and financial liabilities. For subsequent valuation, a contract will be recognised as the greater amount of a) the amount resulting from standards relating to provisions or b) accumulated amortisation of the initial measurement and possible accrued income.
An investment commitment corresponds to that obligation contracted with a related party which can give rise to outflows of funds or other resources in the future. The following is included among these: commitments not recognised in connection with contributing funds or resources as a consequence of incorporation agreements, capital intensive projects carried out by a business combination, commitments not recognised in connection with providing loans or other financial support to the business combination, or commitments not recognised in connection with acquiring a stake, regardless of whether a specific future event occurs or not.

At December 31, 2019 and 2018, the detail of the Company's commitments and guarantees is as follows:

Commitments and guarantees	Group employees, companies or entities (Note 4.3)	Other related parties (Note 4.3)	Third parties	Total
2019
Guarantees for related parties debts	4,857,681	-	-	4,857,681
Guarantees and sureties granted - Other	143,411	23,333	39,370	206,114
Total	5,001,092	23,333	39,370	5,063,795
2018
Guarantees for related parties debts	4,778,148	-	-	4,778,148
Guarantees and sureties granted - Other	90,602	22,895	29,685	143,182
Total	4,868,750	22,895	29,685	4,921,330

a) Guarantees for related parties debts

	Thousands of euros
	2019	2018
E. Financiaciones debt guarantee	3,822,273	3,964,682
Enagás Transporte debt guarantee	-	147,514
Enagás Internacional debt guarantee	-	70,536
Enagás Internacional debt guarantee on the line of credit with Banco Santander	102,453	142,827
TAP debt guarantee	522,952	452,589
Enagás USA debt guarantee	409,811	-
Enagás Services debt guarantee	192	-
Total	4,857,681	4,778,148

The guarantees outlined above mainly correspond to:

The guarantees provided by Enagás, S.A. for all the debt of Enagás Financiaciones for both the bond issues and the loans granted by the European Investment Bank and the Instituto de Crédito Oficial, amounting to 3,822,273 thousands of euros (3,964,682 thousands of euros at December 31, 2018).
The "Guarantees on related party debts" caption includes the corporate guarantee granted by Enagás, S.A. on behalf of the financial entities of Trans Adriatic Pipeline, AG (TAP), in accordance with the Financing Contract signed by this company on November 30, 2018. This guarantee basically covers the following items:
- Principal and interests of the Financing Contract drawn by TAP.
- Market value of the hedging instrument over the interest rate.

At December 31, 2019, the amount guaranteed by Enagás in favour of TAP's creditor financial institutions amounted to 522,952 thousands of euros (452,589 thousands of euros at December 31, 2018). The increase was due to the higher degree of disposal of the TAP loan as well as the purchase of interest rate hedges.

The corporate guarantee was granted by Enagás S.A. jointly with TAP's other partners, so Enagás will only be liable, hypothetically, for the amount corresponding to its holding the share capital of TAP.

This guarantee will be released subject to the fulfilment of certain conditions agreed with TAP's creditors, mainly related to the start-up of the project.

Following commissioning and until the maturity of the loan, there will also be a shareholders' support mechanism, which in the case of the Enagás Group is Enagás Internacional S.L.U, for the repayment of the TAP loan through capital contributions or direct payments to the creditors (Debt Payment Undertaking), to be activated under certain extraordinary circumstances.

Both the guarantee during the construction period and this support mechanism during the operating period are contractually limited by a cap in force throughout the life of the financing arrangement, so that the amounts claimed from Enagás may never exceed a total amount of 903,322 thousands of euros, regardless of the market value of the derivative or any other contingency.

The guarantees provided by Enagás, S.A. for the debt that Enagás USA, S.L.U. holds with La Caixa to finance the purchase of Tallgrass, which at December 31, 2019 amounted to 409,811 thousands of euros.
At December 31, 2018, the guarantee provided by Enagás, S.A. for the debt held by Enagás Internacional to finance the purchase of the Swedegas Group was included.

In this regard, on November 21, 2018, the entire shareholding that Enagás Internacional, S.L.U. held in the Swedegas Group was sold. In April 2019, with the cash obtained from this sale, Enagás Internacional proceeded to cancel the aforementioned loan.

Furthermore, Enagás, S.A. guarantees the amount drawn down by Enagás Financiaciones, S.A.U. in the Euro Commercial Paper Programme (ECP) (Note 3.2.b). At December 31, 2019, Enagás Financiaciones, S.A.U. had not drawn down any amounts.

Finally, on May 17, 2019, Enagás Financiaciones, S.A.U. renewed the Euro Medium Term Note (EMTN) programme for a maximum amount of 4,000 million euros, registered in the Luxembourg Stock Exchange in 2012, with Enagás, S.A. as guarantor.

b) Guarantees and sureties granted - Other

This heading includes the following guarantees and sureties granted to group companies at December 31, 2019:

The technical sureties granted to third parties by Enagás Transporte, S.A.U. amounting to 3,712 thousands of euros (5,123 thousands of euros at December 31, 2018) and by Gas to Move Transport Solutions, S.L., amounting to 877 thousands of euros (1,469 thousands of euros at December 31, 2018) and Enagás Renovable, amounting to 24,000 thousands of euros, all of which are counter-guaranteed by Enagás, S.A.
On December 16, 2019, Enagás, through certain subsidiaries in which it holds interest together with Blackstone Infrastructure Partners, GIC (Sovereign Wealth of Singapore),

NPS and USS and other minority shareholders (the "Sponsors"), have signed with Tallgrass Energy LP ("Tallgrass"), among other documents, a merger agreement (Agreement and Plan of Merger). Under said agreement, the "Sponsors" will acquire the class A shares of Tallgrass that they do not already own. By signing this contract, Enagás, S.A., through its subsidiaries, has investment commitments in Tallgrass Energy, L.P. amounting to 745,050 thousands of euros.

Therefore, the Company, through its subsidiaries, has provided a guarantee amounting to 28,277 thousands of euros in relation to the execution of the investment commitment in Tallgrass. This amount corresponds to Enagás' share of the total guarantee of 105 million dollars required from members.

The Company counter-guarantees Enagás Internacional, S.L.U. the bid bond for the port concession in Colombia for the Buenaventura project in the amount of 1,336 thousands of euros (December 31, 2018: 1,311 thousands of euros).
Also, Enagás, S.A. guarantees the hedging transactions arranged by Enagás Financiaciones, S.A.U. and Enagás Internacional, S.L.U., the fair value of which amounted to 85,209 thousands of euros at December 31, 2019 (61,299 thousands of euros at December 31, 2018).
At December 31, 2018 this caption includes the guarantee agreed by Enagás S.A. regarding the obligations of Enagás Internacional, S.L.U. towards Hellenic Republic Asset Development Fund S.A. for its participation in the sale of 66% of Hellenic Gas Transmission System Operator, S.A. (hereinafter 'DESFA'), for the amount of 21,400 thousands of euros. Said guarantee was cancelled on January 9, 2019 when the transaction was closed on December 20, 2018.

Guarantees and sureties granted with other related parties and third parties at December 31, 2019 include:

The guarantees granted before the Federal Electricity Commission ("FEC") in connection with the service contracts relating to the Gasoducto de Morelos and Estación de Compresión Soto La Marina projects in the amount of 8,909 and 8,013 thousands of euros, respectively, granted by the related party Banco Santander (8,738 and 7,746 thousands of euros at December 31, 2018).
Technical guarantees granted to third parties to cover certain liabilities that may arise from the execution of the contracts that constitute their activity, in the amount of 45,781 thousands of euros at December 31, 2019 (36,096 thousands of euros in financial year 2018), of which 6,411 thousands of euros correspond to guarantees formalised with Banco Santander (6,411 thousands of euros at December 31, 2018), an entity that, as defined in Note 4.3 meets the definition of a related party.