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Alliance sells smaller customers to Shell

Alliance Gas, the UK retail arm of Norway's Statoil, has sold 1400 customer accounts to fellow UK retailer Shell Gas Direct. Shell paid an undisclosed sum for the buyers, all at the smaller end of the industrial and commercial market. The customers comprise about two thirds of Alliance's customer base, but the volume of gas they account for is just a third of Alliance's sales. Alliance is restructuring, and says it wants to focus on buyers in the larger industrial and interruptible sector who take more than 4m therms/yr. Alliance will receive gas from Norway through fellow Norwegian Norsk Hydro's Vesterled and Frigg lines, when deliveries begin this October. When the Norwegian sales cartel, the GFU, is eventually disbanded, all producers on the Norwegian shelf will have equity gas to sell, and Statoil's share will be the biggest. It is likely to ship the majority of the gas that flows through Vesterled. "The deal still leaves us with a very significant portfolio at the upper end," says a company spokesman. The unit margins are larger in the smaller end, but the volume in the larger end more than compensate, says a retail consultant. Shell says that the acquisitions made in the past three years underline its commitment to a market that demands "increasingly high levels of risk management and customer service skills."