Thursday, June 28, 2007
RWE to Study German LNG Terminal; E.ON to Launch Share Buy-Back Scheme
June 28, 2007
Sally Bogle
Global Insight Daily Analysis
In the next few months, Germany's RWE will examine the technical prerequisites and the economic prospects for building a LNG import terminal in northern Germany. RWE, U.S.-based Excelerate Energy, and Nord-West Oelleitung will establish the facility, which will feed up to 600,000 cubic metres of regassified natural gas into the German gas network by end-2010. Separately, German utility E.ON will launch its share buy-back programme on 27 June 2007, a move that will see up to 3.5 billion euro (US$4.7 billion) of shares brought back by end-2007 and a further 3.5-billion-euro-worth in 2008, exclusive of charges. Based on the current share price, this will allow buying back some 58 million shares. The scheme will see E.ON cancel the repurchased shares to optimise its capital structure.Significance: Germany’s second-largest utility, RWE, signed a memorandum of understanding (MoU) with Excelerate in November 2006 to cooperate in downstream LNG activities in Europe.
Under the deal, RWE Trading will market all of the gas delivered by Excelerate to its GasPort LNG terminal at Teesside in the United Kingdom. The two will also jointly evaluate possible sites in Germany, the United Kingdom, and elsewhere in Europe where Excelerate's floating LNG terminal technology could be applied. RWE's efforts could pre-empt rival German group E.ON’s efforts to import LNG through Germany’s first terminal at Wilhemshaven by up to 12 months (see Germany: 23 November 2006: ).
