$1 deal will power Origin into the future

Adelaide Advertiser
Saturday 16/5/2009 Page: 72

Origin Energy has reached conditional agreement to buy the long-term power purchase, gas purchase and sales agreements associated with its Adelaide Osborne Power Plant from a Babcock and Brown Power subsidiary for $1. The Osborne power station is jointly owned by Origin Energy and Canada's ATCO. It is a cogeneration facility, with one gas turbine and one steam turbine that together can generate 180 MWs of electricity.

Flinders Osborne Trading, a wholly owned subsidiary of BBP, holds long-term agreements for the purchase of up to 180MW of electricity from Osborne and the sale of 13.5 petajoules of gas per annum to Osborne power station until 2018. FOT also holds a gas purchase agreement with AGL for gas that it sells to Osborne power station until the end of 2010. Origin Energy said yesterday it had reached conditional agreement with BBP to assume all of those contracts for a nominal $1.

"Assumption of the Osborne agreements will provide Origin Energy with flexible baseload and peaking cover for our current retail electricity portfolio until 2018 and complement Origin Energy's existing South Australian power stations at Quarantine and Ladbroke Grove," Origin Energy executive general manager of energy markets Frank Calabria said. On completion the transaction will provide competitive electricity for Origin Energy in South Australia, the company said. It is expected to be earnings accretive from the 2009/10 financial year.