Royal Dutch Shell Plc  .com Rotating Header Image

Exxon, Shell Said to Consider Sale of German Gas-Storage Sites

BusinessWeek Logo

By Nicholas Comfort

May 11 (Bloomberg) — Exxon Mobil Corp. and Royal Dutch Shell Plc are considering a sale of natural-gas storage capacity in Germany as they focus on exploration, according to three people familiar with the matter.

The companies may begin a sale process next month after deciding which assets to offload from their BEB Erdgas und Erdoel GmbH unit, said one of the people, who declined to be identified because the plans are private.

Shell and Exxon hold equal stakes in the Hanover, Germany- based gas-storage operator, which has about 2 billion cubic meters of working storage spread over three facilities in the north of the country, according to its Web site.

Energy companies are selling filling stations, pipelines and refineries as they boost spending on oil and gas production to take advantage of rising prices. Shell is divesting two German refineries to curb costs and spending, while Exxon sold a stake in a Norwegian pipe network in April as it reviews assets.

The BEB storage assets may attract energy suppliers seeking to stockpile gas to lessen the impact of price fluctuations. Gas futures in the U.K., Europe’s largest market for the fuel, slumped 43 percent in 2009 and are up 15 percent this year.

Gas-Price Volatility

“The attraction of this kind of asset has risen because of volatility on the gas market,” said Christian Kleindienst, an analyst at UniCredit SpA’s Munich unit with a “market weight” rating on Shell bonds and no coverage of Exxon notes. “You don’t want to be just a middleman — utilities will be looking to bolster their margins by securing gas they can use to counter price fluctuations.”

Exxon, the largest U.S. oil company, sold its 9.43 percent stake in Norwegian gas-pipeline network Gassled to Njord Gas Infrastructure AS last month.

Shell said May 6 that it’s in talks with potential buyers for some of its liquefied petroleum gas assets. The company is also in discussions with India’s Essar Oil Ltd. and other interested parties on the sale of three refineries in Germany and the U.K.

Exxon and Shell sold about 3,100 kilometers (1,925 miles) of gas pipelines in Germany to Dutch grid operator Nederlandse Gasunie NV in 2007.

Most of Germany’s gas storage is located in the north of the country, where rock formations are suited to holding the fuel. BEB also sells crude oil and sulfur, according to its Web site.

–Editors: Amanda Jordan, Jonas Bergman

To contact the reporter on this story: Nicholas Comfort in Frankfurt at [email protected]

To contact the editor responsible for this story: Will Kennedy at [email protected]

SOURCE ARTICLE

This website and sisters royaldutchshellgroup.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Comment Rules

  • Please show respect to the opinions of others no matter how seemingly far-fetched.
  • Abusive, foul language, and/or divisive comments may be deleted without notice.
  • Each blog member is allowed limited comments, as displayed above the comment box.
  • Comments must be limited to the number of words displayed above the comment box.
  • Please limit one comment after any comment posted per post.