Good morning, ladies and gentlemen, and welcome to our Conference on Enagás 2020 Financial Results and Strategic Outlook for 2021-2026. The results were released this morning before the opening bell and are available, as usual, on our website at www.enagas.es. Mr. Antonio Llardén, Chairman of Enagás, will host the presentation. We expect this presentation to last about half an hour. Afterwards, there will be a Q&A session, and we will enable to answer any questions as soon as possible.
Thank you for your attention, and I now hand the floor to Mr. Antonio Llardén.
G ood morning, ladies and gentlemen, and thank you for attending this presentation. Joining me today at this online conference call are the Chief Executive Officer of Enagás, Marcelino Oreja, the Secretary General, Rafael Piqueras, the Chief Financial Officer, Borja García-Alarcón, and the Director, Natalia Latorre, and, of course, the Investor Relations Team Directors, Antonio Velázquez-Gaztelu, Francisco García del Río, and the General Director for Institutional Relations and Communications, Felisa Martín. During this conference call, I will summarize our 2020 results. I will update the main lines of action of our strategy through 2026, and I will also present a longer-term roadmap reflecting our vision for the company until 2040. Since 2007, when Enagás presented its first strategy plan, year after year we have been fulfilling our guidance, and over the long term, our investors have recognized us for this consistency.
In 2020, in the most complex context that companies around the world have faced in recent years, we achieved to fulfill all of our commitments once again. This track record shows cases that companies' long-standing resilience. And before going over our results, I would like to begin with an announcement. We have brought forward to 2040 our goal of becoming carbon neutral. Only one year ago, we undertook to achieve carbon neutrality by 2050. Well, as a company that is fully committed to decarbonization, we have now set ourselves a new and challenging goal to be carbon neutral 10 years earlier. And we will do this following a very rigorous technical plan and building on our progress in recent years. From 2018 and 2020, we cut our emissions by 31.1%. In total, since 2014, when we set ourselves into motion, we have cut our emissions by 63.2%.
To fulfill our commitment, we have more than 50 energy efficiency projects underway that are key to our carbon neutral strategy. Our performance and transparency in emissions reduction make us the only company in our sector worldwide to join the CDP Climate Change A List having earned the highest rating in this ranking. Besides, for the fifth consecutive year, Enagás is the industry world leader on the Dow Jones Sustainability Index, where, by the way, we have been listed for the past 13 years. And just this month, the Standard & Poor's Global Agency awarded us the Gold Class 2021 distinction. The presentation describes all the recognitions we received for sustainability in 2020. Sustainability is a topic that, as you know, we understand and work on across all three ESG areas.
For example, in the field of people and corporate culture, we have been recognized for years as one of the best companies to work for. And the Bloomberg Gender Equality Index recognized us as one of the companies that is most firmly committed to equality globally. So our progress in ESG criteria makes us especially proud in a year so unusually tough as 2020. In a year characterized by a health, economic, and social crisis, the company held up very well. First of all, contributing to energy security in Spain and in other countries where we operate, regularly providing an essential service for society, that is, the supply of natural gas. Maintaining the technical and commercial availability of the Spanish gas system at 100% with no flows whatsoever, meeting a higher demand for natural gas in Spain than in 2018.
In such a turbulent year for the economy and business, meeting targets for the 14th consecutive year. Now, I'd like to discuss the company's key financials. We exceeded our net profit target, earning EUR 444 million, up 5.1% against 2019. This strong performance was driven by, first of all, the flawless continuous operation of our infrastructure. Second, our efforts to contain operating and finance costs. Of course, thanks to the contribution of our affiliates, which amounted to EUR 174.8 million, almost 8% more than in 2019. And last but not least, also thanks to a non-recurring positive financial result of EUR 18.4 million due to exchange rate differences. We also have a strong liquidity position of EUR 2.473 billion, which is sufficient to meet all of our financial needs and maturities in the coming years. This is a very positive effect in the current environment of uncertainty and market tensions.
More than 80% of our debt is at a fixed rate, and we maintain a very sound financial position. Both Standard & Poor's and Fitch have held Enagás ratings at triple B, in line with similar companies and European TSOs. To conclude, 2020 was an extremely tough year that took a big hit on the figures and jobs of many companies. However, at Enagás, we met all of our targets and even exceeded them in some cases. As for natural gas demand in Spain, and despite the impact of COVID-19, and the fact that 2020 was a relatively warm year, different from the current one, total demand was 3.1% higher than in 2018, and this means that it was the second highest in a 10-year historical series since 2012.
It was also 5% above the forecast of the Spanish National Integrated Energy and Climate Plan and its target scenario for 2020, with no increase in atmospheric emissions whatsoever. So the replacement of coal with natural gas in Spain has allowed cut in emissions in 2020 by 27% compared to the previous year, according to data from Red Eléctrica, therefore reaching historic lows. These figures show that natural gas is key to the decarbonization process and will remain so for at least the next 15-20 years or even more. Natural gas was also critical in securing supply during the worst cold snap in Spain in recent years. In fact, natural gas met record high household demand that soared within just a few days and hours by 30%, and it also safeguarded electricity generation. I'll now share with you an overview of our strategic outlook for the 2021-2026 period.
In this operating environment, it's quite clear worldwide, and particularly in Spain, that the importance of natural gas in the world in the coming years will be critical as a bridge energy to energy transition. At Enagás, we have a stable and predictable regulatory framework in place set until 2026, and with an efficient and balanced gas system. This gives us visibility, which very few companies have, into what is going to be a key part of our revenues in the next six years. So in this context, our primary mission remains to contribute to energy security, and that is key to any transmission system operator. We believe the role of gas and infrastructure is important to the ecological transition. I would say that they are key to really achieving this transition in due time and form.
They will play a significant additional role in the future of green hydrogen and other renewable gases. Thirdly, we retain our strong commitment to the dividend. All this, keeping ESG, Environmental, Social, and Governance criteria as a core pillar to our strategy. That strategy, until 2026, will be carried out in two distinct stages, in which we will adapt our investment pace to the context. In the first three years, approximately, that is, between now and 2023, we will lay the foundations for future growth and the role of TSOs in the European decarbonization process. We will consolidate the investment effort made so far, and we will also consider the possibility of rotating international assets with the aim of maximizing value for our shareholders. During this stage, we will further strengthen our balance sheet to be well prepared for the investment effort associated with decarbonization.
In the next three years of this period, between 2024 and 2026, we shall accelerate the sustainable investment we are already working on, driving new projects directly linked to the ecological transition. I will now specify the main lines of action and highlights for the 2021-2026 period. In 2021, we will focus, we are already focusing on two priorities. First, to intensify the control plan and savings in overhead, eliminating any expenses that are not essential to the business continuity and to current and future activity and employment. Also, reducing net indebtedness thanks to our solid cash generation. In 2021, the regulatory reform of the gas system approved by the CNMC the Spanish stock exchange regulator, will come into force, which will have an impact, is already having an impact on our results, already known by the market.
So taking all these inputs into account, our net profit guidance for 2021 is to be around EUR 380 million. This figure, coupled with our strong cash generation, allows us to secure the 1% dividend increase to which we committed for this fiscal year. If we now consider the full period from 2021- 2026, the discretionary cash flow generated without additional investment also provides sufficient flex to ensure the commitment to our dividend policy and to continue growing sustainably into the future. In addition, we have high visibility of the expected dividend of our affiliates, as they are regulated assets or protected by take-or-pay contracts. We estimate an average of EUR 250 million per year over the 2021-2026 period. I will now briefly comment on the prospects of some of these international investments you already know.
As to the Trans Adriatic Pipeline (TAP), its commercial commissioning in November after four and a half years of construction was one of 2020 milestones. Natural gas is already flowing through the network of our partner Snam in Italy as to the grid network owned by our affiliate, DESFA. As you know, TAP is a key infrastructure to European energy diversity and security. Now, this project, in which we hold a 16% stake and in which we invested EUR 218 million, will provide Enagás with stable cash flow and high profitability. I have mentioned our great affiliate, DESFA, and I would like to add that through this affiliate, we have gained access to two new assets. In Greece, DESFA has reached an agreement for the acquisition of a 20% stake in the Alexandroupolis Floating Storage Regasification Terminal.
In Kuwait, DESFA has been awarded the provision of the operation and maintenance service for the LNG import terminal at Al-Zour, one of the largest LNG regasification facilities in the world. Enagás is also expected to partake in delivering the service. With regards to Tallgrass, our affiliate in the United States, you already have sufficient and thorough information contained in the presentation. Tallgrass performed quite well in 2020, one of the worst years for the U.S. oil and gas sector because of the OPEC price war and mainly due to the economic and social impact triggered by COVID-19. Its EBITDA, however, showed strong resilience thanks to the company's take-or-pay contracts. This enabled Tallgrass shareholders to be able to distribute at the beginning of 2021 a dividend of $91 million out of 2020 earnings.
2021 will be a year in which Tallgrass will continue to reinforce its financial structure, so between now and 2026, the outlook is very positive. First of all, the United States will contribute to meeting increased world demand for oil and gas. The second half of 2020 saw a strong recovery in prices and production in the basins where Tallgrass Energy operates, so this growth is expected to be sustained and compatible with the business performance forecast of the company's main assets. Furthermore, a sustainability-friendly business line, hydrogen, renewables, etc., was created to strengthen and diversify the portfolio of projects for the company's future growth. In addition, in the 2021-2026 period, Tallgrass expects to pay out an average annual dividend to shareholders of $360 million. In the case of Enagás, this would account for $95 million on average per year.
Tallgrass guidance, and this is very important, is based on a strategic review and analysis process that Tallgrass Board has been conducting since December, using the latest data and forecasts on the performance of the U.S. oil and gas market. Regarding Gasoducto Sur Peruano GSP, the arbitration proceedings are still ongoing, and our legal advisors expect that the award ending this arbitration should be issued by the end of 2022, in the second half of 2022. Now, going back to the key financials in this outlook review, we ratified the dividend policy in place until 2026. This is the most compelling proof of our commitment to our shareholders, and the remuneration is one of our strategic priorities. This sustainable dividend policy is absolutely compatible with all the scenarios envisaged in the stress test that we regularly conduct at the company according to best accounting practices.
Let me remind you of our commitment. In 2021, 2022, and 2023, we shall increase the dividend by 1% per year over the 2024-2026 period. For the time being, we shall maintain a sustainable dividend of EUR 1.74 per share, which, of course, might be increased in the second half of such a period. So in such an uncertain context as the current one, for a company to have such clear visibility of its dividend until 2026 is a sign that it has robust foundations to do so. A key issue at the moment that arouses great interest at meetings with investors are the green hydrogen projects that Enagás is working on. We are currently driving forward a total of 46 renewable gas projects, including hydrogen and biomethane, and all of them meet the following six criteria, which are vital for us.
First, they contribute to decarbonization and by optimizing costs to a fair and inclusive transition. Second, they propel the entire value chain. Third, they contribute to the development of the Spanish manufacturing sector. Fourth, they generate sustainable employment, like always, with other partners, never on our own. And sixth, they offer us a suitable return on investment. For many of these projects to be economically viable, that is to say from a business case perspective, it is critical to obtain support of the Next Generation EU funds.
All these projects, which are directly linked to decarbonization and in which Enagás is involved, put as a whole, and including all partners, represent a total investment of nearly EUR 5 billion should all of them get through. We have been working on decarbonization projects for some time, but we are aware that the major investments to be made will probably take place after 2023.
With regards to hydrogen, we have 30 projects in our portfolio with 50 partners, including different companies and government bodies, in practically all the autonomous communities of Spain, and covering all uses and sectors foreseen in the Renewable Hydrogen Roadmap published by the Ministry for the Ecological Transition and the Demographic Challenge. We implement four types of green hydrogen projects, and let me give you an example for each one of such types. Projects to replace green hydrogen with green hydrogen, such as the eFuels project with Petronor and the Ente Vasco de la Energía in the Basque Country. A second type of project consisting of projects to integrate hydrogen with electricity and renewables and improve the manageability of the energy system, such as the project carried out in La Robla, León, with Naturgy. Third, projects to replicate the entire green hydrogen chain on a small scale.
These are projects that can be easily replicated in different parts of the country or in Europe. For example, the Green Hysland project in Mallorca is conjointly with Acciona, Cemex and Redexis, and that is supported by the Ministry of Industry, the Ministry for Ecological Transition through the Institute for Energy Diversification and Savings, and the Balearic Regional Government. Fourth, projects to promote the manufacture of goods and equipment related to the hydrogen chain in Spain, such as the innovative Sun2Hy project that we are implementing with Repsol for photoelectrocatalysis to manufacture green hydrogen with renewables with no need to use electrolysis. Of course, this is not the right time to go into technical details.
So all these projects are supplemented by other projects which are also related to ecological transition, even though they are not hydrogen-related, such as 16 biomethane projects that are to be developed in the short term, and LNG projects as a decarbonization vector, mainly for maritime rail and land transport. Finally, with regards to our 2025-2040 roadmap, we would like to share with you some thoughts and a longer-term vision of the company's future. Enagás Roadmap, both in the short and long term, is aligned with the European Hydrogen Strategy and in Spain, it is aligned with the entire Strategic Framework for Energy and Climate, in which the long-term decarbonization strategy of 2050 and the Renewable Hydrogen Roadmap approved by the national government are core pillars.
PSOs such as Enagás can play a key role in the European decarbonization process, contributing their expertise and know-how and our capacity as system integrators. Moreover, they can also serve as demand generators and market accelerators, which is key in the case of green hydrogen, as this market does not yet exist and needs to be created. Spain is strongly positioned to become an exporter of renewable hydrogen to the rest of Europe. Therefore, the Spanish gas network is a crucial long-term infrastructure. Enagás is already working alongside the main transmission system operators in Europe, analyzing the European networks required to channel green hydrogen within the framework of the European Hydrogen Backbone. So according to the studies carried out and of the investments foreseen in this European initiative required for green hydrogen vectors, Enagás would be proportionally allocated between EUR 4.2 and EUR 6.3 billion in this 2025-2040 period.
Now that these are just estimated figures resulting from some early studies that are now being conducted across Europe. The future hydrogen network will be able to leverage existing transport infrastructure to a great extent, supplemented by new pipeline and storage facilities to develop the full potential of green hydrogen production and meet demand. Finally, and rather than closing this presentation with conclusions, I would like to finish by emphasizing our present and future strengths. 2020 was an extremely difficult year for everyone, as well as for the economy and businesses. First of all, we withstood the crisis very well, contributing to energy security and providing an essential service at an excellent standard within the Spanish gas system. We met and even surpassed all of our targets, such as our net profit, which was 5.1% higher than in 2019.
We met these targets while maintaining a firm commitment to employment. In 2020, we did not lay off any employees. What's more, we slightly increased the number of company employees for us. Employment is the backbone of our ESG commitment. Demand. Natural gas demand is trending positively, and in a year when the industry came to a temporary halt, it was the second highest in an eight- to nine-year historical series. The company's leadership in sustainability is unchallengeable and is recognized as such by the main indices. In closing, looking ahead, we have brought forward to 2040 our commitment to becoming carbon neutral. The regulatory framework has been set until 2026 and provides high visibility of a significant portion of our revenue for the next six years. Our strong cash generation in the current crisis scenario enables us to maintain our dividend policy with visibility until 2026.
We have also set into motion one of the largest energy infrastructures in Europe in recent years, TAP, which will provide us with stable cash flow going forward. Tallgrass weathered a very bad year for oil and gas in the United States, and the outlook for 2026 is positive, in line with the rally in prices and production by the end of 2020. And in closing, we have a pipeline of 46 renewable gas projects with more than 50 partners that could represent an aggregate investment of around EUR 5 billion. Finally, transmission system operators, including Enagás, will play a key role in the European decarbonization process. I will finish off as I started. Since 2007, Enagás has had a track record of meeting its long-term commitments for 14 consecutive years, and our investors have taken note accordingly. From 2007 to 2020, the total return for Enagás shareholders was 126%.
In the same period, by contrast, the IBEX retreated by -43%. Thank you for your attention, and now I would like to encourage you to ask any questions you may deem suitable, and we will do our best together with the rest of the team to answer them as thoroughly as possible.
Thank you, Mr. Chairman. Ladies and gentlemen, if you want to ask a question, please press Star 1 on your telephone keypad. To cancel, please press Star 2.
The first question is from Alberto Gandolfi from Goldman Sachs.
Thank you very much for taking my questions. Well, I'm going to be having quick questions. The first one, do you think that you can keep this outlook as from 2024-2026? That I reckon it would be around 130% despite the investments related to hydrogen.
From what I understand from your presentation, it's possible that out of these EUR 5 billion of investment, how much of that can we see in 2024 or 2026? So what's the profiling in the hydrogen investments for clean gas? And the second question is about Tallgrass. So looking at the breakdown, and thank you very much for the explanation, it's very clear. Is it possible to reduce the leverage and to continue investing $360 million a year and paying out dividends? It seems that the debt will be very high. So I just wanted to know whether I'm right or not, and how are you considering the contract which is going to end in 2024? Are you thinking of a renovation or not? I wasn't able to listen to the start of the presentation.
Could you give us any indication on the net profit growth up until 2026, whether we can have an outlook up until 2026 on the net profit outlook?
Thank you very much, Alberto, for your questions. We will discuss this internally, and we will answer as soon as possible. Thank you.
Good morning. I'm Alberto Gandolfi. Thank you very much for your questions. With regards to the first question, the payout, we don't have the figure of 130%, but 110% and 115%. We need to clarify that when we talk about a potential investment of EUR 5 billion, it's considering everything: partners' contributions, financial entities, subsidies from the next-generation fund , etc. So the total figure for the entire project, we may do everything or not, but if we do everything, it will be done in a period which is larger than what you were asking for.
What we estimated for the second period, i.e., 2024-2026, it's a string of investments that roughly could be around EUR 600 million. We don't believe that 46 projects will be approved and that all will be completed throughout the period. It will therefore be a higher investment, but we believe that the actual schedule will lead to that second period of having a EUR 600 million investment with partners, and we would find more capital from other partners apart from Next Generation Fund, so we would be talking about a greater figure, so this is what we believe, and that allows us to keep the payout in the second period of the six years.
The second question related to Tallgrass, I appreciate the disclosure topic that you comment, and we are making a lot of effort as a listed company to provide very detailed information on the investments that we have.
Most of the cases are not from unlisted companies, so that we are aware that analysts depend a lot on the information that we provide in order to issue judgments and opinions. We will continue working on disclosure in order to be as transparent as possible. For this period, what we believe, but it's based on the data on the Tallgrass strategic plan, and as partners, we are well aware of, and we have participated in the discussion. For this period, they consider that they can reduce leverage, and they can invest over EUR 300 million, and they can pay EUR 360 million in dividends as average. This can work, and we have a bit of average growth of about 6%.
I don't have time to go into the details of the strategic plan, but I'm sure that the investor relations team and the financial team in an offline manner can provide more information on this. We believe that this strategic plan from Tallgrass, as already mentioned in my presentation, is a result of the works carried out in November and December with very updated information. We believe that they can be met. With regards to the specific contract, which is expected for 2024, Tallgrass has contracts that expire and renew, and we don't see a major issue here, at least in the next three years to come. We believe that demand will continue existing in the market, and the American market is a very lively market, and therefore we see no issues.
With regards to the third question, as we did last year in the results presentation and in the future cash flow, we focus more on the cash flows and not so much on the growth or the profit or other sorts of variables. But with time, we can provide information on the cash flow forecast and what we plan ahead. Thank you very much, Alberto.
It was very clear. Thank you very much.
Well, now we move on to the next question. Javier Suárez from Mediobanca, go ahead.
Good morning, and thank you for the presentation. I have some questions. The first one is related to the long-term strategy, the company's vision.
When the company talks about the long-term vision and to increase or reduce the visibility to 2040, depending on what's going to happen in 2030 or 2028, is it fair to say that the company can see in a scenario that as a result of the fact that the hydrogen offers opportunity, the company should be to turn from reducing the RAB of the company thanks to the hydrogen opportunity, the RAB should start to grow as from year 2023 or 2026? So that would mean that the profile of the company would change. So the company could have an asset reduced, but it would be a flip, and these assets will start to increase. The second question is related to the role of Enagás and of the TSOs, the European TSOs. Where do you think that the role should stop?
What's the Enagás role in the European TSO, and what's the electrolyzers need to have? Would they need to be considered as regulated or unregulated assets? And the third question is regarding asset rotation. I found it very interesting. And you can sell certain assets in the market in order to prepare the company to take up hydrogen opportunities. Is it correct, what I interpret? And the fourth question is related to Tallgrass. In this difficult balance between financial solidity and risk, where do you see what CapEx do you see in Tallgrass, and what's the CapEx going to be like in 2022, or is the company going to reduce debt and then accelerate the CapEx in 2023 onwards? And do you see what's the role of hydrogen with this, and considering with the Biden administration, whether the renewables could be further developed or not? Thank you very much.
Thank you, Javier. We will reply after our internal discussion. Thank you. Good morning, Javier Suárez. I will answer the three first questions, and the last one I will leave it for the CEO, Marcelino. And with regards to the first one, whether we will go from an RAB that will start to gradually go down up until to a positive RAB or growing one, I think the answer is yes. Yes, we absolutely believe that that's the role that we're going to play. And what's going to happen? We'll have to wait and see. It could happen that as from 2024, 2025, we will see a growing investment not only in hydrogen, but also what's to do with decarbonization and renewable gas. But I do see that that's why we put 2040 closer to 2025. In 2040, we will see a change in the orientation of the company.
But we mustn't forget the regulated assets from our company and other companies that will be very important so that the energy system in Europe works. So this means that we are not forecasting traditional investment in the Spanish investment market, but from 2030, we might have to do investments on that. But I won't be talking about this because it's still in the future, but it's very clear that the profile of the company will change considering that the European decarbonization plan takes place. So I'm fully convinced that this is going to happen, and I would even dare to say that it will happen at a greater pace than what we're seeing right now. That's for the first question. The second question, the TSO roles. What's key in the TSO roles is that we are able to keep what the European regulator is asking us, is system security.
And the TSO is not just an additional player that buys and sells. The regulator is asking to ensure the reliability and the system security. And I think that we can contribute a lot to the decarbonization process, and we can be an icebreaker. And in the green hydrogen sector, we need to create a market. There isn't a market. If someone wants to sell or buy green hydrogen, they can't go to the supermarket and get bottles of green hydrogen. We need to create that market. There are the TSOs. The TSOs, following the exact instructions of the regulator, can play an important role. And why not?
With electrolyzers and traditional ones, or only throughout the first 10 years of the process, by creating and structuring a market, by becoming the executing arm of what the regulator instructs, limiting investment or going in one sense and not in the other, or in one sector or in the other, and we can do that, and we are trying to do that with other operators, so my reply is yes. We believe that we can play an important role, and then the European Union, in all its papers, one can find conclusions like, "Let us not make more investments than what we need," and it specifically says to use current investments, and I'm talking about high-pressure gas pipelines and networks, as much as possible, so if you allow me about that, that will resolve 80% of the problem, so the answer is yes.
With regard to the third one, asset rotation, we've done this in the past, and we sold Swedegas where the efficiency was very good, and there was some opportunity to rotate assets. We took advantage of it, and we did other investments that have increased balance. So the answer is yes. So this is not urgent. This is something that will happen in the period and is something that we need to consider. And the last one with regard to the Tallgrass CapEx investments, I would like to hand over to Marcelino Oreja. He can give you further details. He's the CEO. Thank you.
Thank you. When we invested in Tallgrass, we invested in a growing platform, and we think that it can offer us lots of opportunities, one, on the oil and gas-related business, and in order to overcome certain bottlenecks.
The political situation in the United States might avoid projects to be completed, for example, the O&G project that can be adjourned, and other projects like in the ACP pipeline , and that can also affect. And it can also allow us to increase the capacity or to look for other oil flows. And with unregulated assets, there will be also opportunities in storage facilities, and for example, with Cushing. So there will be sustainability as well that will be a very important lever. We are analyzing methane and hydrogen projects, and we are working on the technical side. And the blue hydrogen in the United States will also be an opportunity. And there are some contracts being negotiated with regards to the blue hydrogen contracts with another company that will be using pipelines, Tallgrass pipelines. So there's also a growth opportunity. And also methane.
There's also an opportunity for growth. We will take this into consideration. Then we will be on the lookout for other opportunities that result from the new situation in the United States with regards to the restrictions of the Biden administration. I'm sure that Tallgrass will be a growth platform, and we will find a very important context. The team in Tallgrass will allow us to continue growing. Thank you very much.
Thank you, Marcelino, President. We move on to the next question. José Ruiz from Barclays. Go ahead.
Good morning. I only have two questions. One, in terms of investment, you will invest about EUR 96 million per year. Before, I had EUR 60 million. Can you give us the breakdown to see what are the. For these investments?
Second question: in this first six years, hydrogen investments will be done through joint ventures, and they would be consolidated as equities, and therefore, they wouldn't have an impact on the total consolidated, and whether this would affect the profit contribution of affiliates. Thank you.
Thank you, José Javier. We will close the line for a couple of seconds, and we will reply shortly. Thank you. José Javier, thank you very much for your questions. I will answer in a summarized fashion. When we spoke about the fact that from 2021 and 2026, we could consider an investment of EUR 600 million, we believe that it has to have two destinations, and it's difficult to break them down.
On the one side is related, will be geared towards hydrogen projects, true, but there's another part that we consider that for projects called regulated, and therefore investment in the current network, but related to the decarbonization process. This morning, there was a note by the Spanish Stock Exchange Market Commission, and it indicates very clearly, and I must say that a better picture than what we had in December of the investments that will be required in the existing networks and what we call CoPex. And it's because it's CapEx plus OpEx, and it's related to the decarbonization measures, despite they happen in regulated networks. For example, changing compressors that are more polluting by other compressors. I'm not going to go into technicalities to compressors that don't emit CO2.
From this note by the CNMV, we can present to the CNMV different projects that need to be approved one by one. It's not a fixed amount that we receive, but depending on the approved projects, the moment that we complete these projects, we will have certain revenues resulting from that investment that can be CapEx, that could be considered as OpEx because you're improving the efficiency of certain assets, but the justification is linked to the decarbonization process. Thank you very much, José Javier, for your question, because the fact of this publication by the CNMC, and it's a very good coincidence and good news because it clarifies how these investments are going to happen. We knew that these could happen, but not exactly on renewable gases or hydrogen, but to make the network more decarbonized.
It's very difficult to give an exact figure in terms of what's the average investment on a yearly basis, but part of the investment will need to go through this path. So this is very good news what we had. And the second question, the rest will be geared towards hydrogen projects. And so different to related traditional investments in these projects, we, of course, want to participate with other partners as we do in the international investment and following procedure, which will be led by the Spanish government. This week, the interministerial committee has met and who is in charge to supervise all these topics in order to create a schedule. But these investments will happen with other partners and with another action plan. Thank you very much for your questions.
Thank you, President. We move on to the next question. Javier Garrido from J.P. Morgan.
Hello, good morning. The first question is, I would like a little bit of clarification on the Tallgrass dividend. You talked about EUR 91 million for the Tallgrass partners. Is this the only dividend that you expect to receive in 2021, or do you consider carrying out periodical distributions depending on the earnings report for 2021 estimations? And the second question is, well, 2024, it's a key year where lots of key contracts expire. And I would like to know a little bit more about your vision with regards to rehiring for the REX capacity, considering that the contracts that are going to expire were signed years ago in different market conditions. So could it happen that for that time, for 2024, there could be sufficient demand of projects like biomethane that would lead to the replacement of natural gas that go through REX and to keep those prices?
So basically, if you can give us a little bit more context in terms of what's going to happen in 2024, which is a key year for the Tallgrass financing with regards to the contracts. And the last question with regards to Tallgrass, it's your outlook for Pony Express. And in 2020, we've seen a drop in the earnings or the income statements in Pony Express, and despite that, they've had record levels in volumes. So whether you could please give us your estimate for the following years? And how could we have an increase in volume and link with keeping the tariffs so that tariffs do not continue dropping? And the last question is you can give us an update on the timings on the arbitration?
When do you reckon there's going to be a final decision on the arbitration and when you can receive compensation that you're theoretically receiving? Thank you very much.
Thank you, Javier, for your questions, and we will come back to you very quickly. Thank you. Thank you, Javier Garrido, for your question. Let me start with the last question, GSP, and now the Secretary General will confirm this. The timeline for the arbitration award is being well complied with in due time and form. So we believe that all the procedures are taking place as expected, so as I said before, and based on the information we have from our international advisors, they expect that by the end of 2022, an award will be issued. We should also say that this is going to be an award to be enforced right away.
Of course, I will not make any considerations of this point because actually we will comply with the final decision, but everything is running as expected, so we have peace of mind in this respect. Sometimes regulated companies might be subject to potential regulatory changes or amendments with no clear timelines, but this is not the case here. The timeline is quite clear. The milestones are well known to everybody, and there has not been any new disclosure in this regard because we have to wait for the final award. As for the last question concerning the dividend, it's quite clear. In 2020, the overall shareholders in agreement with the Enagás executive committee, we decided that due to the COVID-19 crisis, we had to analyze whether dividends were going to be paid out or not at the closing of the fiscal year.
Once we had clear figures on the table, and once we verified the start of the rally of the U.S. market, we decided to pay out some interim dividend for the 2021 period charged to 2020 earnings. As for 2021, and based on our strategic plan, the answer is quite clear. Throughout 2021, most likely at the end of 2021, the board of directors jointly with the management team will decide based on the market recovery whether we will be paying out dividend or not. At this point in time, however, we are not going to, well, mention any figure specifically because we had to see how the market performs. As for Pony Express, Marcelino Oreja Arburúa has asked me to take the floor to answer your questions, so I hand it over to you, Marcelino. Thank you very much, Mr. Chairman, and Marcelino for your question.
We invest in strategic infrastructure in the United States with a highly experienced team that we continue to reinforce this year, and therefore this makes us confident as to the company's future. The past week with temperatures below 20 degrees Celsius, we can say that everything went well, showing the soundness of our infrastructure operation. As for Tallgrass operation, this is critical to the country from east to west, and this will provide us with a host of opportunities. Gas supply from east to west is working well. Now, we believe that upon the expiry of the contract, we'll be able to renew those contracts because there is a high demand for gas. In the case of the United States, east to west flows begin to pick up, and we have seen that through some profit earned over the past weeks.
Therefore, the future of the network is guaranteed because there is a demand for natural gas in the United States. Biomethane will also be added, but it will be used mainly in the American West Coast. As for Pony Express, the difficulty, the regulatory difficulty to create new infrastructure guarantees some very high flows. So when we take a look at the average transmission of Pony Express in 2020, we are considering the drop in May and June. Now, we are already operating with 420,000 barrels per day. So when transport picks up in terms of demand, we will be able to grow accordingly. I'm sure that it will be necessary to carry crude from north to south, reinforcing this further. And for this purpose, the gas pipe will be critical.
So we are talking about very critical assets, and we have a highly professional team in place that has been able to weather the situation in 2020 with an EBITDA drop of only 14%. Therefore, I'm confident that by 2024, we will be able to exceed the current guidance, which, by the way, is quite conservative for the time being. Thank you very much, Mr. Chairman, and thank you for your question. Thank you. Next question, please, Sergio.
Mr. Sánchez-Bordona from UBS, please, you have the floor.
Good morning, everybody, and thank you for your presentation, and I would also like to thank you for all the details that you have disclosed. Let me go back to one topic of your presentation on slide 31 in your presentation. You are talking about an increase in volumes.
I would like to know whether you are planning to maintain prices or whether prices will be reduced over the next period. The next question is not actually a question. I need some clarification. I understand that based on your long-term investment projections from EUR 4.2 billion to EUR 6 billion in order to adapt the network to green hydrogen for the 2025-2040 period, I'd like to know whether this is going to be an energy investment only or whether you're planning to bring other partners on board. Now, talking about green hydrogen and other related investments, I would like to know whether you already have some ideas as to how this would be dealt with from a regulatory perspective or whether you believe that this is going to be a business apart from your regulated business in Spain.
That is to say, how is this going to be dealt with from a regulatory perspective? Have you had any discussions in that regard?
Thank you, Gonzalo, for your question. We will discuss the answer, and we will get back to you shortly.
Thank you, Gonzalo. For your question, let me answer very quickly. Just to provide you with a summary based on the information that we have on the U.S. market and based on some discussions with the Tallgrass senior management, and after analyzing the strategy plans, we believe that over time there will be two clear-cut phenomena. On the one hand, there will be a gradual growth in demand. Therefore, we don't think that in the short term the U.S. market is expected to experience a drop in oil or gas demand. We're talking about the short or medium term by 2038.
Of course, we don't know what might happen. So based on the data that we have on the market at this point and based on the business operation in this market, not only with regards to Tallgrass, we can say that in the absence of significant infrastructure projects, and we believe that, well, procurement prices might also pick up. We don't know whether they are going to be very high at this point, but we do not think that we are in a recessive market with increased competition and lower prices. So this is, of course, based on Tallgrass's input. With regards to the other question, what we have done with regards to 2025-2040, this is in line with the European Hydrogen Backbone plans.
Here we are talking about energy investments mainly, but one thing that we could also partner up with some European partners and carry out investments with other partners. The answer, however, is that we intend to carry out investments as long as there will be a network of European TSOs that will be working on a single European network scheme. So that's the answer. As for green hydrogen, there's no answer in this regard from a regulatory perspective, neither in Spain nor in Europe. The European Commission has just published or has just started to prepare another paper that should be finished by 2020 in order to provide some thoughts about green hydrogen to see what is going to be regulated or not, and this involves not only gas TSOs but also electricity TSOs.
After this paper is finalized, it will become a proposal to be submitted to the heads of state and to the European Parliament for approval. Based on what we have heard from Brazil at this point, perhaps we will be able to answer this question by the end of 2022. Of course, I could speculate as to how this will play out. Perhaps one portion will be regulated, another portion may not be regulated, but at this point in time, we cannot actually give a final answer. But for starters, we can say that this market does not exist for the time being. Therefore, we're not talking about liberalizing something that is already in place, but rather we are talking about creating something from scratch. A market that does not exist, overcoming some technical hindrances and some pricing obstacles.
We don't know what the European Commission will decide in this regard afterwards. The same European TSOs have been formally convened by the EC in order to issue our opinion in this regard, not only energy but all European TSOs thanks to the European Transmission Systems Operators Association, and I believe that in two years down the road, we will be having a clearer picture as to what the regulator considers and needs to be regulated if they consider that something needs to be regulated or whether a mixed approach will be applied. We want to define which we have to wait and see what projects are considered to be a priority by the European Commission and countries or which projects are funded by the Next Generation Fund, which projects are postponed until the second part of this period, and this involves us, Enagás and other companies.
We believe that tangible investments will take place as of 2023 and 2024, and they will be concluded by 2025-2026. We are talking about two parallel processes here, but if this information was published or this is information as of February 23rd, 2021, we are in permanent contact with other European partners to see how things will evolve. We will also discuss these matters with Spanish authorities. The national administration has put in place a hydrogen roadmap, but providing concrete regulatory answers at this point. There are four key questions that we normally ask ourselves when drafting an investment plan: what, when, how. We can already speak about what we already know the lines of action, but providing quantities, providing a specific timeline at this point is not possible.
Of course, most companies who are involved in this process already have some mature projects in our pipeline with clear-cut locations, but we'll have to see how everything plays out. I believe that I have answered all of your questions. Thank you, Gonzalo.
Thank you, Gonzalo. Thank you, Mr. Chairman. Next question and the last question in the Spanish room.
Good morning, and thank you for the question. Thank you for taking my question. Following on Gonzalo's question, I would like to know whether Enagás will be a key player in green hydrogen. Should that not be the case, whether Enagás is planning to get involved in the electrolyzer business, that is, would Enagás be banned from other parts of the chain? The next question is concerned with the long-term dividend policy. I understood that the dividend will be EUR 1.74 by 2024-2025, that being the floor amount.
Under which conditions do you think the company would be ready to pay a higher amount? Does this depend on whether the company will have investment opportunities at hand or not, or what will this depend on? Well, those are the two questions I have for the time being. Thank you.
Thank you, Jorge. We'll get back to you shortly. Thank you.
Thank you, Jorge, for your question. Yes, I believe that I have already answered this question. Europe will let us know what it decides about this by the end of next year. In the meantime, we should expect hearings and different papers going on in the European Parliament. So it's going to be quite a fruitful discussion.
In my personal opinion, and again, this is my personal opinion, I believe that taking into account the unbundling approach, which I believe is the key to an energy system in the decarbonization process, to be more specific with regards to renewable gases, I believe that Enagás is poised to, of course, after the support by the regulator, be involved in upstream projects involving electrolyzers just because this is the way in which we can support the creation of this market without, of course, creating any monopoly or exerting any influence on volumes and final prices. We are talking about a market that does not exist at this point except for some, well, factories or laboratories where we might be producing some hydrogen, so TSOs, in that case, should not actually play a disruptive role but rather should help in the process.
In my opinion, this is again my personal opinion, the regulator could say, "Okay, this could be done in order to further develop the market, and after 10 or 12 years, if that market proves to be fully developed and if we have sufficient operations upstream and downstream, perhaps TSOs will sell their stakes, they retreat or withdraw from that market because their role is no longer that important, and therefore you can recover your investment and your profit." But this is speculative. But if we have to create this market from scratch, and this is what we have to do, TSOs and not only gas but also electricity TSOs can play a role that so far was not necessary because the market was dramatically different. So again, this is my personal opinion, and all the same TSOs will be ready to help regulators.
In my personal opinion, I believe that a new market such as that of decarbonization is unlikely to be developed without the involvement of TSOs. Again, this is my personal opinion, mainly when no TSO is trying to exercise a monopolistic role but rather to collaborate with other stakeholders. So I believe that now we have to cover the overall scope, midstream, upstream, and downstream. Otherwise, the market will not develop adequately. Let me give you an example. There's a small project underway in Mallorca, which is quite interesting and that I mentioned during my presentation. There are different companies involved in that project. Also, the regional government and the national administration are involved, and we have already obtained funds from the European Union prior to the launching of the Next Generation EU. Here we're talking about a project to produce hydrogen in a specific territory and for different uses.
That would be virtually impossible unless we have several partners involved upstream and downstream. At the same time, this is not disruptive to the market at all. Rather, it's a good way to start creating the market. So we have to wait and see for the regulator's decisions, and together with other TSOs, we will play an active role in this transparent and straightforward discussion together with other players. And in closing, with regards to the dividend policy, we have a free cash flow of about EUR 1.4 billion, if I'm not wrong. We have carried out our calculations as to the dividend we might pay based on an investment volume of EUR 600 million, but there's still some room to go a bit further.
At this point, we cannot say that we will come up with a specific EBITDA because we have no specific data to make such an assertion, but should this be the case, it would occur mainly in the second half rather than the first half given the current world scenario. So, of course, the dividend might be higher in that case, but again, we don't want to get one step ahead of ourselves because we have capacity to carry out new investments, but for the time being, such investments are not quantified. Perhaps in two or three years' time, we can have a clearer or more specific view in this regard, in which case we will disclose it timely. Thank you, Jorge, for your question.
Thank you, Mr. Chairman. Sergio, next question, please. There are no further questions in the Spanish room.
We will now move on to the English room.
As a reminder to ask a question in the English call, please press star one. We'll take our first English question from Lilian Starke from Morgan Stanley.
Hi, good morning. Thank you for taking my question. The first question I had is just to clarify on the dividend that Tallgrass is paying this year of $91 million, whether that is after the payment to parent, so the interest that you have for the parent debt, or whether this includes the interest that you need to pay to parent. And then the second question I had also on Tallgrass was if you could just provide a bit of detail. I see on slide 32 that there's an expected decline in EBITDA in Tallgrass in 2021 in the range of $685-$735 million compared to 2020's EBITDA. Considering 2020 was a tough year, if you could explain why is there a decline expected in 2021 and what reverts that trajectory that you then expect EBITDA to grow in Tallgrass?
Then just the final question I had was around the overall leverage of Enagás. You talk about the objective to lower leverage in the next two years, and I was just wondering if you could give us a bit of detail on what is that target or what's sort of the aim that you would look to get to in terms of leverage. Thank you.
Thank you. Thank you Lilian, . We'll take some seconds and come back to you very soon. Thank you. Thank you, Lilian, from Morgan Stanley. Well, this Tallgrass dividend that's paid in 2021 out of 2020 is net after paying debts and taxes is direct for the shareholders, so now we would have the aliquot of the EUR 91 million, so this is clear, then the next question, number two. True, the EBITDA that has been prepared by the management team of Tallgrass is a little bit lower than 2020 due to prudence. From that EBITDA, there are 80%. That is very clear and safe, and what's been done is to be prudent because it's not clear, and I think no one's got clear when COVID will disappear in the United States or in Spain or in Germany, so therefore, the market will recover very quickly.
We've done a forecast, a prudent forecast, and to think that along 2021, the COVID effect will be reduced, but it will have a mild effect on certain markets, and so maybe through vaccination, this growth will be quicker, but we wanted to be conservative and not say, "Look," and, in parentheses, I follow football. I'm a great football supporter and Barcelona football fan, and all the accounts in Barcelona that appear in the headlines is that for 2020 to conclude the year, that they will say that the stadiums will be at 50% of capacity, and that's not true, so what I want to say is that year-end 2020 for Barcelona and for Madrid and Manchester City, probably the accounts should have been more prudent and more conservative. In other clubs, maybe they've done it, but my club hasn't done it.
But we are trying not to make that mistake, to be prudent and to be more conservative, thinking that the impact of COVID will be reduced over 2021. But over the period, if this happens quicker, we'll have to wait and see. And then with regards to leverage, Enagás, one of the Enagás objectives is to meet Fitch's recommendation on net debt of about 17%, which is the target which we think that we will comply with. And we don't have specific targets just to comply with what we believe is the correct ratio. And that's what we have now and what keeps us reasonably comfortable. But we don't make it like that's something magical. It's something that we need to meet by market instruction, and that allows us to face our commitments. Thank you very much, Lilian. Thank you, President.
Thank you, Lilian, for your question. Next question, please.
The next question comes from Olivier Van Doosselaere from Exane.
Yes, good morning. Thank you for taking my question as well. I just have one question remaining, which is maybe a little bit linked to the one that was previously asked. You talk about EUR 1.4 billion of discretionary cash flow available over 2021 until 2026. But I do suppose that you would expect the EBITDA to actually come down over that time period as well. And therefore, your leverage ratios would increase if you would actually use all that discretionary cash flow. So I wonder how you think in terms of what cash is really available to you when you also think about what amount of cash flow needs to be used to service the repayment of your debt. Thank you.
Thank you. Thank you, Olivier, for your question. We will come back to you very quickly. Thank you very much, Olivier, for your question. I think I can answer your question. And the Chief Financial Officer has greater knowledge than me, so if he requires further details, he will be more than ready to answer. But to my knowledge, the summary is very simple. We have that cash flow available and that we think that we can use it if there are opportunities. If we didn't use it, it's obvious that indebtedness level will go down, and that's it. And it would be more comfortable. And if we are to use it, then we will keep our indebtedness ratios in the ratios that we have, and the EBITDA will grow. So we have been conservative once again.
We could have said, "Well, we are going to invest for sure," but we wouldn't go or exceed the indebtedness ratio, and we would rather keep our ratio levels considering that there is cash flow available, and this cash flow, if there were projects we would invest, we wouldn't exceed the ratios that we said, and we will have better EBITDA, but we wouldn't throw it out the window, so we'll see how it performs. I hope I answered your question, but Mr. Alarcón will surely be happy to hold a longer conversation with you about this, Olivier.
Thank you, President. Thank you, Olivier, and we'll move on to the next question.
The next question comes from Harry Wyburd from Bank of America.
Hi, good morning, everyone. I appreciate most of the main topics have already been covered, so I'll just keep it to two very quick follow-ups. So the first one's on rotating the international assets. I wonder, can you give us any targets around that? So what quantum of disposals might you be considering? Are we talking, I don't know, mid-single digit hundred millions, or billions? Can you give us some kind of range? And are there any particular geographies you think they're important to focus on there, or any particular structure that you consider? So would this be outright asset sales, or would you look to perhaps combine things and sell a minority? And then second quick follow-up just on Tallgrass. You've obviously given guidance on the dividends, but could you give us some guidance on the net income contribution you expect from Tallgrass, either average or for 2021?
And then just a final quick clarification. You've given us the average dividends for the next few years. Just to give us a sense of the phasing, are you able to tell us what you're predicting for Tallgrass dividend income specifically in the year 2026, just so we know what the end point is for the phasing of those dividends? Thank you.
Thank you very much, Harry. We will reply to your questions in a couple of seconds. Thank you. Thank you, Harry, from the Bank of America. To the first question, I think that I already commented with regard to asset rotation. We have had presence for over time. We've done an example in the past. We don't have a specific target, and I said before, and we don't have a schedule saying like next month we're going to be doing this. We will be attentive. We'll be paying attention to the market. And this will serve for the second question. Normally, we always do a systematic follow-up or monitoring of potential new activities with other partners. We are partners of other partners, so we're not only in one single international investment where we don't have partners.
We always have partners, and we always try to keep in the board of directors a number of agreements that will have certain weight on the decisions. To be honest, right now and due to the current situation in 2021, we don't expect big or large projects like TAP in Europe. Just to give you an example, there are no specific projects apart from the Nord Stream 2, which is not a project. It's work that is completed to 95%, and if it's in the media, it's due to political reasons. We always keep an open eye to potential contacts with other partners. And we have relations with 10 or 15 big partners. We have constant contact to see how they're doing things, both to contribute with assets or to create new infrastructures, but we don't have specific news right now.
With regards to Tallgrass, we have given you an average dividend estimate for 2021-2026, and I think that this average is correct. But we haven't got to the deepest detail that in 2024 it's going to be this, or in 2025 it's going to be that. We believe that the average is with which we feel comfortable, and year over year we will adjust this figure. So thank you very much, Harry.
Thank you, President, for your answer. Thank you, Harry. We move on to the next question.
The next question comes from Antonella Bianchessi from Citi.
Hello, good morning. Just a very quick question. On your guidance, your 2021 payout is already in the region of 120. And given that earnings are supposed to slightly decline going forward because of the regulatory implementation in Spain, can you give us a guidance on the level of payout by the end of the plan? The second question related to this is, can you quantify the distributable reserves that the company has? And finally, a quick question on the CapEx in Spain. You had EUR 92 million. Can you quantify how much of these CapEx are going into the RAB? Thank you.
Thank you, Antonella. We will discuss internally, and we will answer shortly. So to your three questions, thank you very much, Antonella. So the first question, I think that we replied to it partially before. And for the end of the period, it was 115 net BPA. And then our reserves, approximate figure, EUR 2,500 million. And from the CapEx that we could produce, I think that I responded partly, and we believe that there's going to be a CapEx which is going to be centered on the current system, but the project will be approved by the CNMC, which has been published today. And RAB needs to go gradually. It's considered as CapEx, which is partly OpEx and CapEx, and that doesn't influence a lot.
Final RAB, RAB, if things go accordingly, will be the increase of investments as from a certain year of new domain and new field of renewable gas and hydrogen, regardless of whether it will be regulated or not. And I'm sure that we will grow with asset base. Antonella, if you have any other question, the investor relations team after the conference can give you further detail. Thank you very much.
Thank you, President. Antonella, thank you, Antonella, for your question. Now we move on to the last question.
The last question comes from James Brand from Deutsche Bank.
Hi. I appreciate the call's gone on a long time. I'll just give it to two questions, and they're both on Tallgrass. The first one, in your comments in the statement on Tallgrass, you said that in addition to paying the dividend for 2021, you also expected the financial position to improve. Does that mean that you're expecting Tallgrass's net debt to decline at the end of 2021 versus the end of 2020? Or if not, maybe you could provide some quantification on your expectations there. And then the second question is just on covenants at Tallgrass. Are we close to the point where I'm aware that there's some covenants for the holding company debt and potentially also within Tallgrass itself? Are we getting close to the point with seven and a half times net debt to EBITDA that the covenants are starting to kick in?
Could that be restrictive in your ability to pay dividends over the next few years? Thanks.
Thank you, James, for your questions. We will answer shortly.
Thank you, James, for your questions. We have a clear answer to your question. All these disclosures are based on very intensive work carried out with Tallgrass' senior management and the rest of the partners. We are absolutely convinced that these data are fully aligned with their covenant and with such delivery period being considered. So we believe that it's fully compatible in answering your question. But again, if you need any further clarification, please do not hesitate to contact the investor relations team and the CFO. Thank you very much for all of your questions on behalf of Enagás' team. Thank you. Antonio?
Well, thank you. If there are no further questions, we therefore close today's conference call. Thank you very much for joining us.