Centrica PLC
Centrica boosts generation capacity with Killingholme acquisition
Centrica plc today announced it has reached agreement with Killingholme Power
Limited to acquire the 652MW Killingholme CCGT power station in North
Lincolnshire. The gas fired power station will be acquired on a debt free basis
for a cash payment of £142 million, representing a purchase price of £218/kW.
Pending completion in early July, the acquisition will boost Centrica's total
generation capacity to 2910MW, approximately 43 per cent of its peak domestic
demand projection for 2005.
Based on expected load factors, Centrica's total power generation portfolio,
together with the Spalding tolling agreement and fixed price elements of the
British Energy contract, will meet approximately 75 per cent of its forecast
domestic demand requirements in 2005.
Killingholme will operate alongside Centrica's five wholly owned power stations
and its 60 per cent interest in Humber Power Limited, to provide electricity
which matches the typical demand shape of British Gas' customer base. The
acquisition further underpins Centrica's strategy of providing increased long
term stability and protection against electricity price fluctuations and spikes.
Sir Roy Gardner, Chief Executive of Centrica, said: 'Today's acquisition is in
keeping with our 'asset right' strategy of acquiring flexible upstream assets at
advantaged prices.
'Killingholme will help provide increased long term stability against
electricity price fluctuations and boosts our generation capacity at a time when
the market has seen increased wholesale costs. British Gas is the number one
supplier to the domestic electricity market and this deal builds on our longer
term ability to provide a significant proportion of electricity for our
customers from our own sources.'
Given today's high wholesale gas prices, the transaction will be marginally
earnings dilutive in 2004.
Killingholme entered commercial operation for National Power in 1994 and was
subsequently owned and operated by NRG until late 2003 when it was taken over by
a group of twenty stakeholder banks. Centrica Energy will take over
responsibility for the operation and management of the plant which employs 62
staff.
Enquiries:
Centrica Media Relations 01753 494085
Centrica Investor Relations 01753 494900
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