Thursday, December 13, 2007
RWE may buy Excelerate stake by Feb -source
13 December 2007
Reuters News
Bruce Nichols and Peter Dinkloh
HOUSTON/BERLIN, Dec 13 (Reuters) - Germany's RWE AG , Europe's third-largest utility, may clinch a deal to buy a stake in U.S. gas-transport company Excelerate Energy by February, a person involved in the negotiations told Reuters.
One of the pending conditions is that Excelerate needs to demonstrate that its Northeast Gateway terminal, a facility to feed gas from ships into the U.S. grid, works, said the person, who declined to be identified.
The contracts for the deal to buy a 50 percent stake in the company, based near Houston, will most likely be finalized before the end of this year, the person said.
A spokeswoman for RWE said both the utility's management and supervisory board would have to agree to any potential acquisition, declining to give more details.
Both companies confirmed last week that they were in negotiations, without giving the value of any potential deal. Excelerate does not release financial figures on its website.
RWE and Excelerate, owned by U.S. banker-oilman George Kaiser, are already building Germany's first point to feed regasified liquid-natural gas into the German grid in the port of Wilhelmshaven in northern Germany.
The U.S. company operates ships for liquefied natural gas and owns regasification terminals in Britain and offshore Louisiana in the United States. It is preparing to open the Northeast Gateway deepwater Port near Boston, Massachusetts.
The company has been rumored to be for sale for more than a year, according to people familiar with the industry.
Liquefied natural gas -- or LNG -- is natural gas cooled to about minus 160 degrees Celsius (minus 260 degrees Fahrenheit), reducing the volume of the fuel six hundred times.
This makes it viable to transport LNG in large quantities on special ships without the need for pipelines, opening the possibility to transport the fuel to destinations which have no direct link with the source country.
LNG is currently the only way to transport gas from countries such as Iran or Nigeria to the European Union.
Countries in the 27-nation EU bloc are seeking access to fuel from those countries to become less dependent on the few current suppliers, including Russia and Norway.
RWE, with its competitors, is considering building another LNG terminal on the Croatian island of Krk. E.ON , the world's largest utility by sales, is also looking into building one in Wilhelmshaven.
