U.S. utilities will spend big in Asia
U.S. utilities will spend big in Asia
MELBOURNE (Reuter): Two big U.S. power companies said on Monday they would continue investing billions of dollars in Asian energy assets to help drive profits at home.
Michigan-based CMS Energy Corp and Minnesota-based NRG Energy Inc, which last month combined to buy control of Australia's richest power station and coal mine, said they were eying other major investments in Australia and Southeast Asia.
"Both companies here are very active in the Asian region," said David Weaver, of CMS Asia, after settling the A$4.75-billion (US$3.7-billion) Australian purchase.
"This is not the first pot shot at a project. This is part of a very clear strategy of building a business across the region, not just picking up the odd project..."
Weaver and the U.S.-based chiefs of CMS and NRG were in Melbourne to present the Victoria state government a cheque for the Loy Yang A power station and coal mine.
The sale of the 2,000-megawatt plant, the most efficient in Australia, stands as the nation's single biggest privatization.
CMS, which took 50 percent of Loy Yang, and NRG, which took 25 percent, said on Monday they would be natural partners for other major investments in Australia or elsewhere in the region.
"There will be, before too long, another large project where we would work together, whether that be here or in Southeast Asia," said NRG's Asia-Pacific chief, David Scaysbrook.
"Both companies are actively interested in pursuing privatizations...," he told a joint media briefing.
He cited Indonesia, saying it was looking to sell a part or all of its electricity generating system, as well as possible sales of state-owned assets in the Philippines and Thailand.
CMS aims to build its offshore asset base to 40 percent of the group, with Southeast Asia the likely home for most of this capital, said CMS chief operating officer Vic Fryling.
CMS now has 20 percent of its US$9 billion asset base in offshore investments and is active in 10 Asian countries.
It runs India's only independent power station, a gas-fired plant in Andhra Pradesh state. It also runs three plants in the Philippines and is developing a gas business there, Weaver said.
CMS is an integrated energy company that spreads its investment from gas exploration to electricity generation. NRG focuses mainly on electricity generation.
NRG is soon to close a deal on building and operating a joint venture coal-fired power station in West Java, Indonesia. The deal, to be closed in four to six weeks, will be followed by "our second deal in Asia in the next few months", said NRG's Scaysbrook. He said the investment involved gas-fired power generation but declined to say more.
NRG's parent, Northern States Power Co, is dependent on NRG for earnings growth and, in turn, NRG is looking to Asia to help deliver, said NRG chief executive David Paterson.