Banker Goldman Sachs said Friday it had purchased the European natural gas and power trading books of Dynegy Inc. and El Paso Corp., some of them 10-15 year contracts. El Paso said in February that its European trading book had been sold for $80 million but did not disclose the buyer (see Daily GPI, Feb. 28).

No financial figures were disclosed by Goldman Sachs. According to a Reuters source, the banker obtained some “pretty big contracts, particularly on the gas side, where I believe there could be some 10- and 15-year contracts.” The source indicated that the two transactions had “speeded up” the banker’s European timetable as it expands its energy trading business.

Credit Lyonnais analyst Gordon Howald wrote that the deal was a “win-win situation because these companies had to get out of the business.” Howald said Goldman Sachs “wanted to come in cheap and this might have been the opportunity for them to do it.”

In 1991, Goldman Sachs ended a “power advisory relationship” that would have led to a trading business partnership with Constellation Energy Group (see Power Market Today, Oct. 29, 2001). Constellation paid Goldman Sachs $355 million to terminate the agreement.

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