RWE can use the proceeds from the sale for the planned investments in the new core business of renewable energies.
(Photo: dpa)
Frankfurt, Düsseldorf According to financial sources, RWE is preparing to sell its gas storage business in the Czech Republic, which is no longer viewed as a core business. The Essen-based energy company has entrusted the investment bank Barclays with organizing an auction. It should start in the first half of 2022, as several people familiar with the transaction said. The division could be valued at around 500 million euros. RWE and Barclays declined to comment.
RWE Gas Storage CZ operates six storage facilities with a total volume of 2.7 billion cubic meters, which corresponds to the natural gas consumption of the Czech Republic in two winter months. The storage facilities were originally part of the RWE subsidiary Innogy, but were later sold to Eon. After the large-scale swap between RWE and Eon, they were returned to RWE at the behest of the competition watchdog.
The gas storage business is particularly interesting for bidders who want to arbitrage in natural gas trading by buying gas cheaply, storing it in the caverns and selling it again at high prices. Czech gas storage facilities are of particular interest to companies that are already active in east-west gas trading, such as the Czech CEZ, the Austrian OMV or the German Wintershall.
The gas storage facilities are not regulated assets for which investors can expect a fixed interest rate. The interest of infrastructure investors is therefore likely to be lower than that of other gas companies. Most recently, gas pipelines such as Ferngas and Thyssengas were sold at high prices in Germany.
Top jobs of the day
Find the best jobs now and
be notified by email.
However, this winter in particular, gas storage facilities have proven their great importance for security of supply. Because gas was becoming scarce in Europe, the gas price skyrocketed – and the gas that had previously been fed into the caverns at lower prices could be sold at high profits. The current low levels in gas storage facilities across Europe are being watched with concern.
Investments in renewable energies
RWE can use the proceeds from the sale for the planned investments in the new core business of renewable energies. CEO Markus Krebber announced a few weeks ago that he would invest around 50 billion euros by 2030.
RWE always has to generate capital through sales in order to be able to implement the plan. Krebber plans to regularly sell at least shares in new wind and solar parks in order to be able to cope with even more projects.
But sales of peripheral businesses are also supposed to free up capital. The gas storage facilities in the Czech Republic are now included, even if RWE itself remains heavily involved in energy wholesaling.
RWE wants to keep its West German gas storage activities, also against the background of a possible use of the future energy carrier hydrogen. The group has five storage facilities with a storage volume of 1.7 billion cubic meters in the towns of Epe and Xanten near the Dutch border and in Staßfurt in Saxony-Anhalt.
When it is stored, the gas is filtered, cooled and compressed. When it is released, the pressure is reduced to the level required in pipelines.
More: Investor Macquarie buys gas network operator Thyssengas
