PARIS — The French utility GDF Suez and China’s sovereign wealth fund said Wednesday that they were in exclusive talks to seal a $4 billion alliance that would help GDF finance its expansion in Asia and offer Beijing access to new energy resources.
GDF outlined the details of the partnership, its second large deal in a year, after the purchase of 70 percent of International Power, as it reported earnings for the first half of 2011 that beat forecasts.
Under the partnership, the wealth fund China Investment Corp. will pay €2.3 billion, or $3.3 billion, for a 30 percent stake in GDF’s exploration and production unit. The Chinese fund will also purchase the French group’s 10 percent stake in a natural gas liquefaction plant in Trinidad and Tobago for €600 million, a joint statement said.
The fund will also co-finance GDF’s projects in Asia and the Pacific, expanding a natural gas exploration and production business that has represented less than 3 percent of its revenue, and help the utility win deals in the high-growth region.
“The Asia-Pacific is clearly a very promising region for gas operations,” the GDF chief executive, Gérard Mestrallet, said during a conference call. “It is crucial that a key gas operator like GDF Suez has the means to play an important role in the region.”
Mr. Mestrallet, who has said the Fukushima Daiichi nuclear plant disaster in Japan this year opens the way for a “golden age” of natural gas, estimated that Asia accounted for two-thirds of the world’s liquefied natural gas market.
In China alone, three L.N.G. plants are being built, with 14 more planned in coming years. GDF hopes to capitalize on the Chinese fund’s local knowledge and network of contact to win power and environmental service deals in the country.
The $400 billion fund and the utility expect to conclude the deal by year-end.
GDF shares, up in the early going, closed down 4.2 percent in a broadly declining market.
GDF’s earnings before interest, taxes, depreciation and amortization, known as Ebitda, rose 8.2 percent in the first half, to €8.9 billion, beating analysts’ expectations. The gain was largely fueled by the acquisition of a British rival, International Power.
Mr. Mestrallet said any slowing of growth in the United States and Europe as a result of recent market turmoil would be more than offset by strength in emerging countries.
GDF plans to spend an average €11 billion a year from 2011 through 2013 on gas and power production projects in emerging countries, where it expects 80 percent of the world’s new power production capacity to be built over the next 20 years.
Getting the backing of the Chinese fund means that GDF will be able to share the financing effort on capital-intensive exploration and production projects. In Australia for instance, GDF is due to make an investment decision for the Bonaparte L.N.G. project, which analysts estimate at around $8 billion.
The deal is another bid by China to bolster its influence over Western-owned energy assets. Last month, China’s top offshore oil producer, Cnooc, reached agreement to buy the struggling oil sands company Opti Canada, soon after PetroChina failed to agree on the terms of a $5.6 billion venture with Encana, another Canadian energy company.
Source: www.nytimes.com
GDF outlined the details of the partnership, its second large deal in a year, after the purchase of 70 percent of International Power, as it reported earnings for the first half of 2011 that beat forecasts.
Under the partnership, the wealth fund China Investment Corp. will pay €2.3 billion, or $3.3 billion, for a 30 percent stake in GDF’s exploration and production unit. The Chinese fund will also purchase the French group’s 10 percent stake in a natural gas liquefaction plant in Trinidad and Tobago for €600 million, a joint statement said.
The fund will also co-finance GDF’s projects in Asia and the Pacific, expanding a natural gas exploration and production business that has represented less than 3 percent of its revenue, and help the utility win deals in the high-growth region.
“The Asia-Pacific is clearly a very promising region for gas operations,” the GDF chief executive, Gérard Mestrallet, said during a conference call. “It is crucial that a key gas operator like GDF Suez has the means to play an important role in the region.”
Mr. Mestrallet, who has said the Fukushima Daiichi nuclear plant disaster in Japan this year opens the way for a “golden age” of natural gas, estimated that Asia accounted for two-thirds of the world’s liquefied natural gas market.
In China alone, three L.N.G. plants are being built, with 14 more planned in coming years. GDF hopes to capitalize on the Chinese fund’s local knowledge and network of contact to win power and environmental service deals in the country.
The $400 billion fund and the utility expect to conclude the deal by year-end.
GDF shares, up in the early going, closed down 4.2 percent in a broadly declining market.
GDF’s earnings before interest, taxes, depreciation and amortization, known as Ebitda, rose 8.2 percent in the first half, to €8.9 billion, beating analysts’ expectations. The gain was largely fueled by the acquisition of a British rival, International Power.
Mr. Mestrallet said any slowing of growth in the United States and Europe as a result of recent market turmoil would be more than offset by strength in emerging countries.
GDF plans to spend an average €11 billion a year from 2011 through 2013 on gas and power production projects in emerging countries, where it expects 80 percent of the world’s new power production capacity to be built over the next 20 years.
Getting the backing of the Chinese fund means that GDF will be able to share the financing effort on capital-intensive exploration and production projects. In Australia for instance, GDF is due to make an investment decision for the Bonaparte L.N.G. project, which analysts estimate at around $8 billion.
The deal is another bid by China to bolster its influence over Western-owned energy assets. Last month, China’s top offshore oil producer, Cnooc, reached agreement to buy the struggling oil sands company Opti Canada, soon after PetroChina failed to agree on the terms of a $5.6 billion venture with Encana, another Canadian energy company.
Source: www.nytimes.com
No comments:
Post a Comment