Banpu Power Plc (BPP), the power generation arm of Banpu Group, has announced a share purchase deal worth US$430 million (14.1 billion baht) to acquire a new power plant in the US as it pursues more environmentally friendly electricity generation.
The deal, made through BKV-BPP Power LLC, a joint venture between BPP and Banpu Group, will lead to the purchase of 100% of shares in Generation Intermediate Holdings II LLC, which runs Temple 1 power plant in Texas, said BPP chief executive Kirana Limpaphayom.
The purchase is funded by the internal cash flow of BKV-BPP Power and loans from financial institutions, he said. The transaction is expected to be completed in the fourth quarter.
Mr Kirana said the investment will expand the "business ecosystem" of Banpu Group, which also operates a shale gas production business in the US.
Temple 1 power plant is a combined cycle gas-fired power plant, with power generation capacity of 768 megawatts. The plant has operated since July 2014.
"The share acquisition is in line with our investment direction targeting operating power plants that utilise high efficiency, low emissions technology in order to generate immediate cash flow," he said.
The plant uses combined cycle gas turbine technology to ensure more efficient electricity production, which is also environmentally friendly.
As an operating plant, it can help Banpu generate revenue immediately.
Mr Kirana said Texas is an area where demand for electricity is high and the plant has priority to be the first to supply electricity to the market under a "merit order" system because it has low cost and steady power generation.
The facility supports gas transport and storage, which helps the operator better manage costs and have more flexibility in power generation.
This investment also reflects the synergistic value between BPP and BKV Corporation (BKV), a subsidiary of Banpu Group, according to BPP.
BKV is among the top 20 natural gas exploration and production companies in the US.
Previously, BPP invested in Nakoso IGCC power plant in Fukushima, which started operation in April.
This investment resulted in BPP expanding its power generation capacity in Japan by 128MW in one year.
