Dynegy quits the North Sea

Dynegy, the crisis-torn US energy trader, is preparing to sell its most valuable UK asset: its North Sea gas-storage business, worth around £600m.

The Houston-based company, which last month refused to swear to the truthful- ness of its accounts, is expec- ted to announce the disposal of its Rough facility next month.

To be handled by investment bank ABN Amro, the sale will be a big boost to Dynegy, which has warned it is close to bankruptcy. It is expected to make a £329m profit on the deal, which will also include its onshore gas-processing terminal at Easington, near the mouth of the Humber.

Dynegy bought the businesses from BG Group last year for £421m. The deal also included a gas-storage operation in salt cavities at Hornsea, east Yorkshire.

Hornsea is being sold separately, with an estimated price tag of at least £150m, and Dynegy is expected to announce a buyer later this month. Companies thought to have expressed an interest include Centrica, TXU, Powergen and Innogy. Together, Rough and Hornsea account for around 85 per cent of the UK's storage capacity.

While the UK's electricity market is suffering from over- supply – leading to a fall in wholesale prices that has partly contributed to the collapse of British Energy – Lattice, the monopoly gas pipeline operator, has warned the Government that the UK could face a gas shortfall in three years.

At Rough, Dynegy wants to maintain a minority interest in the facility. It is also understood that as part of the deal, the company wants to secure a management contract.

Dynegy was saved from almost immediate financial collapse in August by the sale of its Northern Natural Gas pipeline in the US to Mid American Energy for $1.88bn (£1.2bn).

Another troubled US group, Aquila, is trying to sell its retail power business, which used to be called Midlands Electricity.