Friday, December 14, 2007
RWE eyes Excelerate
14 December 2007
Tradewinds
Lucy Hine London
German utility RWE is rumoured to be offering between $500m and $600m for a 50% stake in US onboard regasification specialist Excelerate Energy and is expected to conclude its negotiations before the end of the year.
Talk of an impending deal between the two companies was rife among delegates at CWC's LNG Summit in Rome last week. RWE later confirmed the two companies were in discussions.
Sources who know Excelerate well say banks value the company, which has been touted for sale for over a year, at around $1.6bn.
They comment that a buy would be "a huge risk" for RWE, which is banking on securing product that is not deliverable for several years.
However, they add that it would give the German company options, including access to the US and UK markets through Excelerate's terminals there and add that the amount of cash is not a huge outlay for RWE.
Excelerate, which is backed by US billionaire George Kaiser, already has a relationship with RWE. Last year the two companies teamed up under a deal that would see RWE market all the gas that Excelerate shipped into the UK via its Teesside GasPort import facility in Teesside. It was officially opened in February but the plant has yet to receive a commercial cargo.
Earlier this year RWE and compatriot Nord-West Oelleitung hooked up with Excelerate to develop a quick-start LNG-import facility at Wilhelmshaven in northern Germany for 2010 start-up.
RWE has a stake in a planned LNG terminal in Croatia and an agreement in place to take a share in Vopak's Gate LNG terminal.
Excelerate, which works closely with Belgian shipowner Exmar, operates a fleet of eight specially built LNG regasification vessels (LNGRVs) and one conventional LNG carrier. Five of the LNGRVs are due to be delivered from Daewoo Shipbuilding & Marine Engineering from March through to 2010.
The company, whose former president, Kathleen Eisbrenner, left to join Shell in August, also owns and operates the Gulf Gateway offshore port in the US Gulf and is due to open a similar facility dubbed Northeast Gateway off the coast of Boston this month.
