Dynegy stores attract RWE

GERMAN utility RWE has emerged as the front runner to buy the huge North Sea gas storage assets of US energy trader Dynegy, which analysts believe could fetch up to £750m. Sources close to Dynegy said RWE's appetite for gas trading would make the former's strategically crucial facilities a welcome addition to its stable.

Dynegy bought its stake in the North Sea's depleted Rough gas field, now used for storage, and the Hornsea onshore storage facility from BG for £421m last year. Storage prices have doubled in the past two years, meaning Dynegy can expect a substantial profit from the sale. But analysts warn a buyer would almost certainly be told by regulator Ofgem to lease spare capacity to third parties.

Houston-based Dynegy has come under growing pressure since the collapse of rival Enron. It is being investigated by the Securities and Exchange Commission over its accounting treatment of a gas transaction that critics say was aimed at improving the appearance of its cashflow.