NGC wants to generate more power

By Phil Boeyen, ShareChat Business News Editor

Thursday 21st March 2002

After an unsuccessful foray into electricity retailing last year Natural Gas Corp (NZSE: NCH) has signalled an intention to expand its electricity generation business.

The company says it is looking for partners to help implement the expansion following a strategic review which concluded that its position in energy wholesaling could be enhanced by involving industry partners in its electricity generation activities.

CEO, Phil James, says the company intends to have discussions with prospective partners over the next few months to assess interest and to explore opportunities.

"These may include gas contracting arrangements and the further development of existing generation sites."

Although it's too early to discuss potential partners Mr James says the company has identified a number of options potentially involving existing or new entrant participants in the market.

"Generation remains a key business for NGC and the company believes opportunities exist to enhance the competitive position and value of this activity, while also providing mutual benefits in the management of risks associated with electricity trading."

NGC's core businesses is gas and electricity wholesaling, asset management and the provision of energy services. The company says there is a strong link between the natural gas and electricity generation activities from which to leverage value.

J B Were is advising the company in its search for partners.

NGC wrote off more than $300 million in last year's accounts after it exited the retail electricity sector, selling its customer base to Meridian and Genesis. The company was caught out by the cold, dry winter in 2001 when wholesale spot prices soared and it was forced it to sell electricity at a loss.

Comments from our readers

No comments yet