Osaka Gas to participate in IWPP business in UAE
Osaka Gas has reached an agreement with Marubeni Corporation for an acquisition of equity interest currently held by Marubeni in an Independent Water and Power Project (IWPP) in Abu Dhabi in the United Arab Emirates. Marubeni currently owns 20% equity interest in the project company (Ruwais Power Company) and 50% in the operation and maintenance company of the Shuweihat S2 project, and Osaka Gas will acquire half of the equity held by Marubeni for each of these companies (10% and 25%, respectively). After the transaction is completed, the ownership structure of the project company will be; 60% ADWEA, 20% International Power-GDF Suez, 10% Marubeni, 10% Osaka Gas (Osaka Gas UK, Ltd.).
This undertaking is to accommodate the robust demand for power and water in UAE with a gas-fired power plant with the output of 1,500MW and the seawater desalination capacity of 454,600 m3 (100 million gallons) per day. The facilities have been under construction 250km to the south west of the city of Abu Dhabi by the consortium of Siemens, Samsung, and Doosan Heavy Industries, since December 2008 towards the scheduled start of commercial operation in autumn 2011. The power and water from the plant will be supplied to Abu Dhabi Water and Electricity Company (ADWEC), owned by Abu Dhabi Water and Electricity Authority (ADWEA) .
Shuweihat S2 constitutes Osaka Gas’ first investment in power asset in the Middle East after North America, Europe and Australia as part of the company’s endeavor to expand its overseas energy business along the energy value chain to secure long-term stable earnings. This acquisition adds the net overseas generation capacity of Osaka Gas to 1,380MW. Abundant in natural resources, UAE is ranked No.5 in oil and natural gas reserves with Aa2 in Moody’s credit rating. The UAE government has been promoting privatization and improving business efficiency of power and fresh water generation through direct foreign investments.