Nov. 14, 2002 — Dynegy Inc. announced Thursday that it has sold its remaining Dynegy Storage assets in the United Kingdom to Centrica plc.
Under the terms of the purchase agreement, which was executed Thursday, a subsidiary of Centrica paid approximately $500 million for the subsidiaries that own Rough, an offshore partially depleted natural gas field in the North Sea, and Easington, a natural gas processing terminal located on the East Yorkshire coast.
“The storage business sale is yet another significant accomplishment in our capital plan, which continues to improve our liquidity and enable us to focus on our core businesses going forward,” said Bruce Williamson, president and chief executive officer of Dynegy Inc. “When combined with the steps we are taking to restructure the organization and address the company’s financial obligations, we are continuing to build momentum for the new Dynegy and drive the company forward.”
Following the September 2002 sale of Dynegy Hornsea to SSE Energy Supply Limited, a unit of Scottish and Southern Energy plc., for approximately $200 million, the remaining Dynegy Storage assets included Rough and Easington. Rough is the major provider of natural gas storage in the UK and is used by approximately half of the country’s natural gas shippers.
It has a deliverability rate of 1.5 billion cubic feet per day and a total customer storage capacity of 100 billion cubic feet of natural gas. The Easington terminal processes Rough and third-party natural gas streams for delivery into the UK natural gas transportation network. Centrica will employ substantially all of Dynegy Storage’s employees.
The sale is consistent with Dynegy’s previously announced plans to execute a sale or joint venture transaction involving its UK gas storage assets in connection with its ongoing capital and liquidity plan. Dynegy Europe Limited now consists of energy marketing and trading. The company’s previously announced restructuring initiative will involve an exit from this business in the United States, Europe and Canada over the next three to six months. Mike Flinn, currently president of Dynegy Europe, will manage the exit in Europe, which is expected to reduce the company’s collateral requirements and overall corporate expenses.
ABN AMRO acted as the exclusive financial advisor to Dynegy in this transaction.
Dynegy Inc. produces and delivers energy, including natural gas, power, natural gas liquids and coal through its owned and contractually controlled network of physical assets. The company serves customers by aggregating production and supply and delivering value-added solutions to meet their energy needs.