ELECTRICITY Generating Public Co Ltd Group (EGCO) plans to push ahead with the purchase of a 49 per cent ownership stake in Paju Energy Service Co Ltd (Paju ES), which operates a power plant in South Korea.
The signing of the agreement – reflecting the company’s pursuit of investment opportunities in Asia - is scheduled to take place this month, involving investment of Bt26.2 billion, EGCO said. The agreement is expected to close in January.
EGCO said in a filing to the Stock Exchange of Thailand yesterday that the stake purchase would be made through its wholly owned subsidiary Gen Plus B.V. The investment was approved by its board on October 19 and will be subject to relevant closing conditions under the transaction documents.
Paju ES owns and operates the Paju Power Plant, a combined cycle gas-fired power facility in Gyeonggi province. The plant has a production capacity of more than 1,800 MW and uses imported liquefied natural gas (LNG) as fuel.
Paju ES is owned and was developed by SK E&S Co Ltd (SK E&S), the first private power company to directly import LNG from overseas markets to South Korea, including LNG from producers in Australia, Indonesia and the United |States, among other countries worldwide.
The Paju ES power plant began operation in February 2017 and supplies electricity to Korea Electric Power Corporation, the sole off-taker of wholesale power generation in South Korea, through Korea Power Exchange, the market operator of the South Korean cost-based pool power market.
“South Korea has a robust power market with strong prospects for steady growth in power demand. The country is focused on promoting the use of clean LNG fuel as well as renewables to meet this demand. This investment represents a unique and important opportunity for EGCO,” Jakgrich Pibulpairoj, EGCO group president, said.
“We see a number of business synergies between SK E&S’s gas to power business and prospective development opportunities in Thailand and other core markets in Asia where gas to power projects have become an important means of providing reliable, clean power.
“Moreover, SK E&S is recognised as an LNG to power specialist with business interests throughout the entire LNG value chain. The partnership that will begin with our co-investment in Paju ES will provide an excellent platform for promoting this type of business together in Thailand and elsewhere in the region.
Beyond gas to power opportunities, we will also explore renewables as an area for potential future collaboration in Korea and elsewhere in Asia.”
EGCO Group’s operating result for the first nine months of 2018 showed the net profit of Bt21.754 billion, an increase of 117 per cent when compared to the same period last year, due to the divestment of three assets in the first quarter. If considering the third quarter of 2018, the company recorded Bt3.947 billion net profit, or 12 per cent higher than the previous year, mainly from exchange rate appreciation.
As of October 31, EGCO Group runs 26 operating power plants with total equity contracted capacity of 4,260 MW in five countries across the Asia Pacific region – Thailand, Laos, the Philippines, Indonesia and Australia. It has three projects under construction with total equity contracted capacity of 544 MW.