Exxon & amp; Shell Selling German Natural Gas Storage Facilities
August 19, 2010
GDF Suez SA, and the infrastructure investment units of Deutsche Bank AG, AXA SA, and Prudential Plc, all made initial bids to purchase natural gas storage facilities in Germany which are currently owned by Exxon Mobil Corporation and Royal Dutch Shell Plc.
After receiving initial bidding offers at the end of July, Exxon and Shell are planning on entering into negotiations with all four of the bidders. Exxon and Shell are both intending to sell the BEB Erdgas und Erdoel GmbH venture’s two smallest facilities. Additionally, Exxon has plans to sell more of its gas storage facilities. Estimates for the total value of the sales are at more than $1.29 billion.
In an effort to create additional funds to support their spending on more profitable oil and gas production, Exxon, Shell, and many other oil companies are selling off assets, such as pipelines, refineries, and gas stations. Shell is planning on reducing expenses by selling three additional European refineries. In April, Exxon sold interest in a Norwegian pipeline network.
Shell and Exxon hold equal percentages in BEB Erdgas und Erdoel GmbH, a gas storage company located in Hanover, Germany. The company operates three facilities, in Uelsen facility, Harsefeld, and Doettlingen. Most of the facilities for natural gas storage are in northern Germany, where natural rock formations are best suited to store natural gas.
In April, Exxon, which is the largest oil company in the United States, sold its 9.43% interest in Gassled, a Norwegian gas pipeline network, to Njord Gas Infrastructure AS. In 2007, Exxon and Shell both sold approximately 1,925 miles of gas pipelines in Germany to Dutch grid operator Nederlandse Gasunie NV.