Gas Natural buys Enron's Ecoelectrica stake

Monday, June 23, 2003

Spanish gas distributor Gas Natural SDG has signed a deal with bankrupt US company Enron to buy its 50% stake in Puerto Rico's Ecoelectrica combined-cycle gas generation plant and liquefied natural gas (LNG) regasification plant for US$130mn, Gas Natural said in a statement Monday.

Ecoelectrica comprises a 540MW plant and a 115,000 cubic meter capacity LNG regasification plant in the south of Puerto Rico. The plant has a 20-year power purchase agreement (PPA) with local power utility Prepa, and accounts for around 20% of Puerto Rico's present power generation, a percentage that according to the statement could rise to 40% in the next 10 years.

US company Edison International (NYSE: EIX) owns the other 50% in Ecoelectrica through its Edison Mission Energy unit.

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Gas Natural said the deal was an important step in its policy of overseas expansion, which has already seen it reach 3.9 million clients in Latin America.

In a shareholders' meeting Monday, the company said it plans to invest 850mn euros (today US$981mn) in Latin American expansion, especially in Mexico and Brazil, in 2003-2007, increasing the number of clients to 5.7 million by 2005. By the same date, it plans to increase sales to 214,000GWh from 126,000GWh in 2002.

Latin American operations contributed 12% of Gas Natural SDG's 1.2bn euro gross operating profit in 2002, and the company aims to increase this to 19% of the anticipated 2.2bn gross operating profit in 2007.