Australia?s EWC receives backing to acquire S. Sulawesi gas and power plant assets

Australian firm Energy world Corporation (EWC) announced on Monday it had received US$100 million funding offer from Standard Chartered Bank, Singapore to pay for its existing debts and to potentially acquire oil and gas and power plant stakes in South Sulawesi from US firm El Paso Corp, with whom the company is now in dispute.

EWC and El Paso were partners in Sengkang gas block and 138-MW Sengkang gas-fired power plants, both of which are located in S. Sulawesi with equal stake in both projects. Sengkang power plant gets gas supply from Sengkang PSC.

In August last year, El Paso announced that it had signed deal to sell its Asian assets including its interest Sengkang power plant and Sengkang PSC to US power firm Globeleq. EWC considered El Paso decision to sell South Sulawesi assets to Globeleq as breach of contract as EWC considered that El Paso was required to offer its interest in the projects to EWC first.

EWC issued claims to the Federal Court of Australia last year; seeking orders ultimately requiring El Paso Group to sell its interest in both assets to the former as it claimed it had first right of refusal for the assets.

?The opportunity for EWC to acquire these assets will arise if a commercial settlement with El Paso is reached or EWC receives favorable ruling in the litigation currently ongoing between the parties that is due to be heard in the Federal Court of Australia commencing 16 October 2006,? said EWC.

EWC said successful acquisition would increase the company?s shares in both assets from 50 percent to 100 percent.(alex)