Shell Boosts U.K. Trading Business on First Utility Energy PactSally Bakewell
Royal Dutch Shell Plc agreed to buy and sell power and gas for First Utility Ltd. as Europe’s largest oil company boosts its U.K. trading business.
Shell Energy Europe Ltd. will act as intermediary for the Warwick-based supplier by sourcing its energy from the wholesale market, First Utility said today in an e-mailed statement. The trading deal will last 10 years with a five-year review. It replaces a deal for the service with Morgan Stanley, First Utility Chief Executive Officer Ian McCaig said by phone.
Shell is expanding its U.K. trading business after striking accords with independent suppliers in North America and Europe. It entered a five-year supply pact with Just Energy Group Inc.’s Hudson Energy Supply U.K. unit in February for its British retail business. First Utility is the U.K.’s largest independent energy supplier, with 300,000 residential and business customers.
“Shell have got enormous scale,” McCaig said today from Warwick. “They’ll have access to more products more of the time, and therefore will allow us to be more competitive more of the time.”
The accord will help the company reach half a million customers in the next couple of years and “head towards a million beyond that,” he said.
Shell confirmed the press release.