By the OGJ Online Staff
HOUSTON, July 16 -- Dynegy Inc., Houston, has agreed to buy BG Storage Ltd. and associated assets from UK company BG Group PLC for £421 million.
The deal is subject to regulatory approval. BG said the sale secures the greatest shareholder value for the assets.
Dynegy called the transaction "a major expansion of its energy convergence business."
BG Storage provides gas storage services in the UK. Its assets include the partially depleted Rough offshore storage facility in the southern North Sea that has deliverability of 1.5 bcf/day and nine underground storage caves in Hornsea, East Yorkshire, that have deliverability of 620 MMcfd. The two storage facilities have combined capacity of 111 bcf of gas. It also includes a 73% stake in the Easington onshore gas processing terminal, Humberside.
The company also recently secured planning permission to develop six salt caves at Aldbrough, near Hornsea.
The associated assets include the remaining 27% interest in the Easington onshore gas processing terminal, which is owned by another BG Group subsidiary; the Amethyst gas processing and condensate transportation agreement; and BG Group's interest in the offshore York discovery which extends into Block 47/3d
Chuck Watson, chairman and CEO of Dynegy Inc., said, "This acquisition represents a significant expansion of our global presence and advances our long-term strategic plan to replicate our US energy delivery network in Europe."
BG Group will continue to have a commercial relationship with BG Storage to enable BG Group to carry out its gas trading activities.
Dynegy will pay for BGSL largely with cash. BGSL will become part of Dynegy Europe
