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UPDATE 1-Australia's AGL says approached by Alinta to buy coal-fired Liddell plant

Wed, 04th Apr 2018 03:02

* No formal offer received - AGL

* Liddell slated to be closed in 2022

* Australia government sought Alinta's interest(Adds fresh Alinta MD quote, background)

SYDNEY, April 4 (Reuters) - Australia's biggest energyproducer AGL Energy Ltd said on Wednesday HongKong-owned rival Alinta Energy has expressed interest in buyingits coal-fired Liddell Power Station, which is slated to beclosed.

AGL wants to shutter the plant in 2022 as part of a phasedexit from coal by 2050 so it can become a purely renewableenergy supplier. But the firm has come under pressure fromAustralia's government to sell the power station instead.

AGL said it received "an approach from Alinta last nightexpressing an interest in entering negotiations" to buy theplant, but that no formal bid had been made.

A formal offer "would be given consideration in order tomeet our obligations to customers and shareholders," AGL said inan emailed statement.

Australia's electricity supply business has become a hotpolitical issue in the past year, after a string of blackoutsand price spikes hit households and major industrial usersincluding miners BHP and Rio Tinto.

That has prompted the country's conservative government toscrap some subsidies for renewable projects. This week abreakaway group of lawmakers called for the government toprovide more financial support for new coal-fired plants.

Alinta's Managing Director Jeff Dimery said in a radiointerview on Wednesday that the government had asked hiscompany, which is owned by Hong Kong's Chow Tai Fook EnterprisesLtd, to consider buying Liddell.

"We stated that we had no objection to owning criticalassets required for stability and reliability in the marketplaceas we transition to a low-carbon economy," Dimery toldAustralian Broadcasting Corp radio.

"We conducted some preliminary analysis that led us to anopinion that, at a commercial rate, there's an opportunityhere," he added.

AGL previously rejected the idea of selling the plantbecause it needs Liddell, located north of Sydney, to maintainsupplies to its own customers ahead of the original 2022 closureplan.

"AGL is relying on Liddell to generate power for ourcustomers until 2022 and we will require its infrastructure forour replacement plans into the future," it said on Wednesday.(Reporting by Tom Westbrook in SYDNEY Additional reporting bySumeet Gaikwad in BENGALURUEditing by Byron Kaye and Aaron Sheldrick)

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