International Herald Tribune: Exxon-Shell venture draws German and Australian interest

By Ambereen Choudhury and Thom Rose
Bloomberg News
Thursday, November 1, 2007

LONDON: Macquarie Bank and the RREEF infrastructure fund of Deutsche Bank are among firms that could bid for a German gas storage and transport network owned partly by Exxon Mobil, according to five people involved with the proposals.

The network, BEB Transport & Speicher Service, a joint venture between Exxon Mobil and Royal Dutch Shell, may sell for at least €1 billion, or $1.4 billion, said the people, who declined to be identified because the bidding is confidential.

Credit Suisse is assessing offers, the people said. Babcock & Brown, an Australian investment bank, may also bid, they said.

The network connects the Netherlands and Denmark with German cities like Hamburg and Berlin. BEB also has a gas storage site near the Dutch border. Oil companies like Shell and Exxon Mobil are selling off peripheral energy businesses to focus on exploration, production and refining as crude oil trades at record levels.

“BEB is an interesting asset for companies with networks in the region,” said Peter Wirtz, an analyst at WestLB Equity Markets in Düsseldorf. “It could help consolidate the market.”

BEB operates an approximately 3,100-kilometer, or 1,927-mile, transmission system. It also has underground storage facilities with a capacity of more than 2 billion cubic meters of gas, according to its Web site.

Gabriele Radke, an Exxon Mobil spokeswoman in Hamburg, declined to comment.

“We have no further developments regarding BEB,” said Andre Romeyn, a Shell spokesman.

Jack Grone, a spokesman for Credit Suisse in London, declined to comment, as did officials for the potential bidders.

Wirtz said EWE, one of the top five German utilities, might be interested in buying BEB. EWE’s spokesman, Daniel Waschow, declined to comment.

The potential BEB bidders have targeted Germany for expansion. Babcock & Brown has raised funds for a European infrastructure fund. Macquarie, the world’s largest private infrastructure investor, has raised about 12.4 billion Australian dollars, or $11.4 billion, for its investment funds since April.

Macquarie on Wednesday raised its bid for the shares in Techem that it did not already own and said that it expected to receive more than 50 percent of the stock in Techem, the biggest German reader of utility meters.

http://www.iht.com/articles/2007/10/31/bloomberg/bxgas.php

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