The Australian: Power stations to change hands: “Shell's corporate spokesman Simon Buerk said the company had not announced any intention to sell down its stake. However in a strong hint to possible movements, he said Shell had an active divestment program under way.” (ShellNews.net)
By Scott Murdoch
September 15, 2004
DOUBT has arisen over the future ownership of two of Queensland's major power assets after global speculation that Shell was about to sell out of a joint venture.
Reports circulated yesterday that Shell was looking to offload its 68 per cent stake in InterGen, a US-headquartered company that owns 20 power stations around the world.
The group holds 50 per cent of the Callide C station near Biloela and 54 per cent of the Millmerran station - two of Queensland's largest coal-fired power facilities.
The assets are owned by a holding company, OzGen, which is likely to be the subject of any transaction.
The stations are unlikely to be sold separately.
InterGen's Australian general manager David Nelson declined to comment on the possible transaction yesterday as too did the Queensland Government-owned CS Energy, which part owns Callide C.
Shell's corporate spokesman Simon Buerk said the company had not announced any intention to sell down its stake.
However in a strong hint to possible movements, he said Shell had an active divestment program under way.
In the 2003 financial year, Shell offloaded $US4.5 billion ($6.42 billion) and so far this financial year has committed to selling $US3.5 billion worth of projects.
Over the past five years, the multinational has averaged $US4 billion in sell-offs annually up to 2003.
"We don't comment on the market rumour and speculation which has been circulating here (London) as well," Mr Buerk said.
"More broadly we do have an ongoing divestment program. Obviously the driver to that is attractive asset prices and pushing capital into other high-return projects."
Queensland Treasury said the possible change in ownership of Callide C did not concern the Government despite the recent power distribution crisis.
The remainder of Millmerran is privately held.
"Such a sale does not demonstrate any negatives of public-private partnerships as it is not considered a PPP by Government," Treasury said last night.
"Selling off stakes is a regular occurrence in the global economy and CS Energy entered into the Callide C agreement with InterGen knowing that this could be a possibility in the future."
Callide C was commissioned in July 2001 and is a 900-megawatt facility powered by black coal.
CS Energy has pre-emptive rights to buy the remaining share of Callide C in the event of a sale.
However, a Brisbane-based energy analyst said it was unlikely the government-owned agency would be interested given it was the sole participant in the $1.1 billion Kogan Creek project.
"CS would want to use its capital for that (Kogan Creek). While it would probably be attractive at a price they might be tempted to buy the rest," he said.
"But only at a pure financial return, because there would be no strategic benefits for them. It would be highly surprising if they bought out the other half."
The Callide C joint venture was originally owned by Shell Coal before it divested its coal holdings to Anglo.
The power stations were the only asset retained during that transaction.
"There might be someone internationally who would be interested in buying the whole of InterGen," the analyst said.
http://www.theaustralian.news.com.au/common/story_page/0,5744,10772469%255E462,00.html