Shell and partners said to want to sell windfarm stakes

'Companies are looking to reduce their ownership in the Borssele III and IV wind farms by as much as 45 per cent'

Wind turbines stand at the Hornsdale wind farm, operated by Neoen SAS, near Jamestown, South Australia, on Friday, Sept. 29, 2017. About half the capacity of the world’s largest lithium-ion battery project is installed at Hornsdale wind farm in South Australia, Tesla chief executive officer Elon Musk said at an event on Sept. 29. When this is done in just a few months, it will be the largest battery installation by a factor of three in the world, Musk said. Photographer: Carla Gottgens/Bloomberg
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Royal Dutch Shell and its partners Eneco Holdings and Mitsubishi are seeking to sell a stake in two Dutch offshore wind-farm projects that may cost US$1.4 billion to develop, two people familiar with the plan said.

The companies are looking to reduce their ownership in the Borssele III and IV wind farms by as much as 45 per cent, according to the people who asked not to be named . The fourth partner, infrastructure contractor Van Oord, is keeping its share of the project.

The move would allow the companies to scale back financial exposure to the wind farms and redeploy the cash in new projects with the potential for higher returns. Shell has said only that it is trying to draw in additional investors, refusing to detail what that may entail. Its strategy is to focus on developing the early stages of gigantic wind farms and avoid holding the assets as long-term operations, which offers a steady but slower payback.

“This is part of a planned assessment by the consortium on how to best fund the project and future offshore wind projects for the long term,” Eneco said in a statement on Monday, which Shell said it and the other partners endorsed. “Offshore wind projects require substantial capital. We are in the energy transition for the long-haul.”

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The project marked Shell’s first foray into large-scale offshore wind developments. Shell and its partners won a contract to build the facilities 22 kilometres off the port city of Zeeland in the Netherlands last December, beating 26 other bidders in a government auction for power-generation capacity.

With a combined capacity of 700 megawatts, the units may require investment of $1.4bn by the time they are complete in 2020, according to estimates from Bloomberg New Energy Finance. By those calculations, a 45 per cent stake may be worth about $630 million.

None of the companies have disclosed their specific stakes in the project or their outlook for the total investment required. One of the people familiar with the deal said Shell has 50 per cent, Eneco 30 per cent, and both Van Oord and Mitsubishi each have 10 per cent.

The stake may be split and sold to multiple buyers, the people said. The companies are currently running the sale process and expect to wrap it up before the end of the year. One new equity partner has already been selected, according to one of the people.