Dong Sells Mongstad Power Plant to Statoil for $295 Million

Dong Energy AS said it sold its Norwegian Mongstad gas-fired power plant to Statoil ASA.

Dong agreed to sell the heat and power plant Energiverk Mongstad in western Norway for 1.8 billion kroner ($295 million), the Danish company said in a statement today. The deal is expected to close in the third quarter.

Stavanger-based Statoil’s facilities at Mongstad also include the largest refinery in Norway. It has an annual capacity of about 12 million tons of crude oil that’s exported to North America, Europe and Asia.

Dong said the transaction is expected to result in a pretax loss of 150 million Danish kroner ($26.1 million).

“With the divestment of Mongstad, we are taking another significant step towards the realization of our financial action plan,” Henrik Poulsen, chief executive officer at Dong, said in a statement. “We have now divested a total of approximately 9 billion Danish kroner of non-core activities.”

Morten Eek, a Statoil spokesman, confirmed the transaction. While it’s no secret that profitability at the plant is a “challenge,” the purchase will help with overall operations at Mongstad, he said. The power plant will continue operations as a separate company, he said.

Before it's here, it's on the Bloomberg Terminal.