EWC, El Paso reach settlement on S. Sulawesi power, gas assets

ASX-listed energy firm Energy world Corporation (EWC) announced on Friday it had signed on September 15 2006 a Purchase and Sale Agreement with U.S firm El Paso Energy for the transfer of interest to the former in the Sengkang power plant and Sengkang gas field, both of which are located in South Sulawesi.

The settlement date for the transaction is on or before November 15, 2006. The company said funding for the acquisition had been arranged by Standard Chartered Bank. Acquisition value was not disclosed, but earlier the company said Standard Chartered had offer US$100 million funding.

?As the consequence of reaching this agreement by mutual consent, the litigation between the parties has been withdrawn,? the company said.

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.

Successful acquisition would increase the company?s shares in both assets from 50 percent to 100 percent.(alex/denny)