CLP/China Grid may buy Exxon stake in Castle Peak for $2.8B

CLP Holdings and China Southern Power Grid may pay around $2.8 billion for a 60 percent ExxonMobil stake in a Hong Kong power venture.

By increasing its existing holding in Castle Peak Power Co Ltd in partnership with one of China's two main power grid companies, CLP would be able to secure supply of Chinese natural gas needed to fuel its Hong Kong plants, analysts say.

ExxonMobil had long sought to sell the asset as part of efforts to focus on its core business of oil and gas.

CLP, which supplies electricity to users in Kowloon and New Territories in Hong Kong, said there is no certainty an agreement will be reached.

CLP already holds 40 percent of Castle Peak, which owns three coal-fired power stations with generation capacity of 6,908 megawatts -- part of which can burn gas as a back-up fuel.

For the source of this story, click here.