Arrow Energy has purchased ERM Power Limited's remaining 25.05% interest in and taken over the operations of the Braemar 2 power station for $66.1 million.
Arrow Energy already held 74.95% after purchasing a 50% interest in 2008 and a 24.95% interest in 2009 in the Queensland plant (the latter from ERM Power). ERM Power led the development of Braemar 2, which began commercial operations in July 2009.
Braemar 2 is a 519 MW open cycle gas turbine peaking power station, situated approximately 30 kms west of Dalby in Queensland, and a 110 km high-pressure gas pipeline. It is adjacent to the Braemar 1 power station. Arrow is currently supplying coal seam gas (CSG) to the Braemar 2 Power Station at a rate of approximately 15 petajoules per annum from the company's Daandine and Tipton West gas fields in the Surat Basin. Revenues for the power station are underpinned by an electricity hedge agreement with Origin Energy. Arrow sells electricity from the Daandine, Townsville and Braemar 2 power stations which all use CSG as feedstock.
HopgoodGanim Partner Michael Hansel and Solicitor Katherine Hammond acted for Arrow Energy on this deal and stated, "We were pleased that the purchase of the remaining interest in the power station was seamless for our client, Arrow Energy, and that the business can continue to service high electricity demand with this particular plant."
The power station operates as a peak and shoulder period generator that aims to dispatch electricity during periods of higher electricity demand and capture the associated higher electricity prices during that time. As an accredited generator under the Queensland Gas Scheme, Braemer 2 also benefits from earning Gas Electricity Certificates.
For further information contact Kym Hill, Communications Advisor.
