Construction and operation of caverns as attractive and property-related asset class

As part of the restructuring of the business model, the formerly independent Caverns division was integrated into the Investment division. The core business of IVG Caverns is the construction, operation and leasing of caverns for oil and gas storage. Cavern lessees are companies of strong financial standing from the energy industry and public oil storage organisations. Amongst others, parts of the German Federal Oil Reserve are stored in Etzel.

In 2008, IVG sold 70 caverns (40 existing caverns and 30 development caverns) to an institutional fund for which IVG is responsible for the fund and asset management. The first development cavern was transferred to the fund in 2009.

IVG Investment - Caverns | Key figures in € m, Status 31.12.2010

IVG Caverns has been operating underground storage caverns for oil and gas in Northern Germany for over 30 years. We originally managed the site in Etzel partly on a trustee basis for the Federal German government well until 2005.

The market for the storage of oil and gas is becoming more important than ever: As the extraction of most raw materials takes place in politically unstable regions, commodity prices are always subject to strong fluctuations. Oil and gas suppliers are reacting to this situation by trying to counteract fluctuations by setting up an appropriate storage infrastructure. The resulting rising demand for oil and gas storage facilities opens up considerable business opportunities for IVG Caverns.

The storage caverns are connected to the European energy grid by oil and gas pipelines. They are used by customers to cover peaks in consumption, as interim storage for import deliveries and in particular for the storage of a large part of the strategic oil reserves for Germany.

Moreover, preparations were begun for the Etzel-Bunde pipeline. The project, which we are realising as co-investors, will optimise our connection to the Middle European pipeline network.