April 21 (Bloomberg) -- Enel SpA, Italy's largest utility, may sell its natural gas network to pare 55.8 billion euros ($89 billion) of debt amassed after buying power plants in Spain and Russia, Chief Executive Officer Fulvio Conti said today.

The gas network may fetch as much as 2 billion euros, said two people with knowledge of the company's plans who asked not to be identified because a decision on the sale hasn't been made. Conti is also considering selling other assets, he said.

Enel's debt ballooned after it teamed up with Acciona SA to buy Spain's Endesa SA in October for 42.5 billion euros. The Rome-based utility, which had 11.7 billion euros of borrowings in 2006, also acquired Russian generator OAO OGK-5.

``It's important Enel delivers on its pledge to cut debt,'' said Nicola Porcari, an analyst with Exane BNP Paribas in Paris, who has an ``outperform'' recommendation on the shares. Asset sales ``could be a positive catalyst for the stock'' as investors would be assured Enel can preserve its dividend, he said.

Enel fell 0.5 percent to 7.08 euros in Milan trading today. The company, whose stock is down 13 percent so far this year, will pay a total dividend of 49 cents on 2007 earnings and plans to return at least that much cash to investors in the five years through 2012, Conti said March 13.

The company's 30,000-kilometer (18,600-mile) gas pipeline network has a book value of 1.72 billion euros and reaches 1,205 towns and cities across Italy, according to the company's Web site and 2007 annual report.

Enel has 2.3 million gas clients, giving it a 12 percent share of the Italian market. Enel would keep the network's gas customers after the sale, the people with knowledge of the plan said.

Possible Sale

``It's one possibility we're evaluating,'' Conti said of the gas network sale during a press conference at the International Energy Forum conference in Rome today. He didn't indicate a price for the asset.

Enel may also sell ``other assets'' in addition to a network of high-voltage power lines up for sale and power plants in Spain and France it agreed to sell last month.

Italy's former power monopoly is selling assets not related to its main power generation and energy-sales businesses to help maintain an A credit rating, Conti said today. Selling the power lines and some plants will help cut debt to as little as 45 billion euros by 2012, the company said March 13.

Enel is rated A- at Standard & Poor's, the seventh-highest investment-grade rating, and a level higher by Moody's Investors Service at A2.

E.ON Sale

The company was removed from negative credit watch and its long-term debt rating was affirmed by S&P on April 11 after Enel agreed to sell assets in Spain and Italy to E.ON AG of Germany.

``The rating decision confirms our debt structure is sound,'' Conti said. ``We've set up an asset sales program to reach our debt and credit rating goal. The sale to E.ON, which will be completed in the next two to three weeks, confirms our ability to manage debt.''

The company may raise between 1.5 billion euros and 1.7 billion euros for the gas network and could get about 1.2 billion euros should it sell its high-voltage power lines, Porcari said.

Enel is in talks with Terna SpA, the operator of about 90 percent of Italy's high-voltage power lines, on the sale of Enel's remaining long-distance grid, Conti said today. Enel isn't seeking other offers while in discussions with Terna, he said.

``We're dealing with a willing buyer and we will continue talking with them for the next few weeks or months,'' Conti said. ``A decision will be made in the short term and for sure the deal will be closed within the year.''

Potential Buyers

Possible buyers for the gas network could include utilities like France's Suez SA or northern Italian power provider A2A SpA or infrastructure investors like Italian state-supported fund F2I, Porcari said.

Suez spokesman Antoine Lenoir declined to comment on any investment plan targets. The company has a joint venture to sell power with Rome utility Acea SpA and is merging with Gaz de France SA, which has a gas sales business in Italy.

F2I aims to invest in infrastructure projects in Italy, said an official who asked not to be named. He declined to comment on any potential transactions. An A2A spokesman could not immediately comment.