FRANKFURT (Dow Jones)
German utility RWE AG (RWE.XE) Tuesday said it has decided to withdraw from the Adria LNG consortium that plans to build a regasification terminal for liquefied natural gas on the Croatian island of Krk.
In an emailed statement, the company said the decision to withdraw from the project was a "consequence of RWE's current review of its global LNG business."
RWE added it has offered all of its shares in the Adria LNG project to its consortium partners.
In a written statement, the Adria LNG consortium said that RWE's withdrawal "will have no impact on the future development and realization of the project."
The consortium added that RWE's shares in the project will be transferred to the other members, according to procedures that were set up when the joint venture was established.
A spokeswoman for the consortium wasn't immediately available to clarify the exact distribution of the shares among the remaining partners.
RWE currently owns around 16.7% in the Adria LNG consortium and has an associated capacity of 3 billion cubic meters of LNG a year.
The other consortium members are Germany's E.ON AG (EOAN.XE), Austria's OMV AG (OMV.VI), Frances Total SA (TOT) and Slovenia's GEOPLIN. E.ON owns around 31.2%, while OMV and Total own roughly 25.6% each. GEOPLIN holds 1% of the shares.
The consortium plans to build a regasification terminal on the Croatian island of Krk, which is expected to be operational in late 2014.
Initially, the project partners plan to build a terminal with an annual capacity of 10 BCM, which will be expanded to 15 BCM in a second stage.
To date, however, a final investment decision hasn't been made. That decision is expected to be made in 2010.
RWE's withdraw from the Adrian LNG project was based on the findings of an ongoing review of its LNG operations, which the company expanded over the past two years.
In 2008, RWE acquired a 50% stake in U.S. LNG company Excelerate Energy LLC, which owns a fleet of specially designed LNG tankers capable of regasifying the LNG before delivering directly into the pipeline grid. This bypasses the need for traditional onshore LNG regasification terminals like the one the Adria LNG consortium plans to build in Croatia.
RWE also gained access to a LNG regasification terminal currently under construction in Rotterdam, the Netherlands, via the takeover of its peer Essent NV last month.
Netherlands-based Royal Vopak NV (VPK.AE), one of the world's biggest independent oil and chemicals storage companies, and Dutch state-owned gas network operator Gasunie NV are building the Rotterdam LNG terminal, in which RWE's Essent holds a 5% stake.
Vopak and Gasunie also plan to build another regasification terminal in the Dutch town of Eemshaven, in which Essent holds a 50% stake.
RWE Supply & Trading spokesman Michael Rosen Tuesday said the company hasn't yet made a decision about what it intends to do with the stakes in the Rotterdam and Eemshaven LNG terminals.
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