June 5 (Bloomberg) -- Macquarie Group Ltd., 3i Infrastructure Ltd. and Deutsche Bank AG's RREEF fund plan to submit separate offers for the oil and natural gas storage unit of Germany's IVG Immobilien AG, said four people with knowledge of the plans.

The division of Bonn-based IVG is expected to draw first- round bids of about 1.5 billion euros ($2.3 billion), said the people, who declined to be identified because the details are private. IVG gained the most in seven weeks, rising 5.8 percent to 16.17 euros in Frankfurt trading.

Demand for underground gas storage sites is increasing as European supplies dwindle and the continent becomes more reliant on fuel imports. Gas tends to be pumped into storage when demand for heating is low during the summer months and used up during the winter when demand is high. IVG, Germany's largest commercial property company, may use the proceeds to cut loans.

``The incoming cash flows can be used to reduce the financial debts of the company and maybe to buy back some shares,'' said Frank Neumann, an analyst at Bankhaus Lampe in Dusseldorf, who rates IVG a ``buy.''

In March, IVG said it may sell all or part of its caverns division, which rents hollow salt domes to companies including BP Plc and Statoil ASA.

Net income this year will fall by at least 66 percent, IVG has forecast. The owner of offices in Munich and Hamburg and London's ``Gherkin'' tower, is trying to reduce expenses to make up for a drop in demand for office space because of job reductions among financial-services companies.

Underground Storage

IVG has been operating underground storage facilities for oil and gas in northern Germany for more than 30 years, according to its Web site. The caverns are located in Etzel, near Wilhelmshaven, and include 40 storage caverns. The company holds the rights to develop an additional 90 caverns.

There is ``significant'' interest in the unit, IVG spokeswoman Andrea Woege reiterated in an interview. The company expects initial offers early this month. She declined to comment on specific bidders or price.

Babcock & Brown Ltd. of Australia and Goldman Sachs Group Inc.'s infrastructure fund may also be interested in the IVG unit, the people said. London-based Goldman spokeswoman Joanna Carss declined to comment. Spokespeople for the other potential bidders in London declined to comment.

Macquarie Group, Australia's biggest securities firm, plans to raise more than 5 billion euros for its third European infrastructure fund, four people with knowledge of the fund said in April.

The Sydney-based bank competes with RREEF and Goldman's infrastructure fund in seeking money to buy toll roads, ports and utilities, investments which typically provide predictable returns even when economic growth slows.

To contact the reporters on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net

Last Updated: June 5, 2008 11:43 EDT