EWC says mediation with El Paso over Sulawesi assets fails

Australian Stock Exchange-listed firm Energy world Corporation (EWC) said on Tuesday that mediation with US firm El Paso to settle their dispute over gas block and power plant assets in South Sulawesi failed to reach agreement.

EWC said that the mediation conference as ordered by the Australian Federal Court, was held in Sydney on 22 March and 24 March 2006. EWC earlier said that the purpose of the mediation was to negotiate the terms of sale of the shares held by El Paso Group entities to EWC Group members.

El Paso announced on August 1, 2005 that it had agreed to sell its interests in both Sengkang block and the 138-MW Sengkang gas fired power plant to a subsidiary of US power firm Globeleq Ltd. EWC also has interest in both Sengkang Block and Sengkang power plant.

On November 9, 2005, EWC issued claims to the Federal Court; 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.

EWC said El Paso's decision to sell interest in Sengkang projects to Globeleq was a material breach of partnership agreement, which is required El Paso sell its interest in the projects to EWC.

The company said that the Federal Court would decide on the matter on 8 June 2006. (alex)