- Deal expected to be competed in December quarter, QIC says
- CLP selling assets amid `challenging' conditions in Australia
QIC Ltd. agreed to buy the Iona gas storage plant in Australia for A$1.78 billion ($1.28 billion) in cash from Hong Kong’s CLP Holdings Ltd. as the infrastructure investor looks at expansion opportunities.
QIC, the fund manager owned by the government of Australia’s Queensland state, is purchasing an asset that plays an essential role in energy supply on the country’s east coast, the Brisbane-based company said in a statement on Thursday.
“It has long-term contracts with its customers, which underpin stable and predictable cash flows, while also presenting a platform for further growth and expansion opportunities,” according to QIC’s statement.
CLP is selling the plant as part of a strategy to “restore value” in its investments in Australia, the company said in a separate statement. The power company is shifting attention to other markets after saying in February it faces “extremely challenging” conditions in the nation.
CLP unit EnergyAustralia Pty, the electricity supplier and owner of coal, gas and wind assets in the country, is keeping all of its assets under review, the company wrote in an e-mail statement. “Nothing is sacrosanct,” it said.
CLP added 0.8 percent to HK$66.95 a share at 9:46 a.m. in Hong Kong. The Hang Seng Index lost 0.6 percent.
AGL Energy Ltd., Australia’s biggest power producer, said Thursday that it obtained long-term gas storage rights to use the Iona facility. Those rights are subject to a number of conditions, AGL said in its statement.
The Iona plant, located in Victoria state, has storage capacity to supply as much as 500 terajoules of gas per day, according to EnergyAustralia’s website. The facility is used by energy companies to store gas during periods of low usage, which can then be distributed by pipeline to supply markets around Melbourne and Adelaide when demand is high.
“Iona is a strategic, high-quality infrastructure asset in the Australian east-coast gas market,” according to QIC, which said the deal is expected to be completed in the December quarter.