Shortlist narrows for Alinta Energy assets in WA

Alinta Energy‘s Newman Power Station in the Pilbara.

Macquarie Group, BP and APA Group are among the parties shortlisted for the West Australian assets of Alinta Energy, say sources, while Pacific Equity Partners is out of the race.

Parties were short-listed late last month in the Goldman Sachs-run contest and the expectation is that about four suitors have made it through to round two.

Other parties that were earlier understood to have lobbed offers were the Hancock business interests of mining billionaire Gina Rinehart, advised by Highbury Partnership, Fortescue Metals and Wesfarmers, which also put forward an offer.

There had been some suggestion that Hancock was no longer in the running.

The Alinta offering is tipped to be worth between $500m and $1bn and now final bids will likely land within six weeks, with APA and Macquarie thought to be serious acquirers.

Chow Tai Fook is selling at least a majority of Alinta Energy’s Pilbara operations.

Chief among them is the Newman Power Station, which includes a gas and distillate power station with a battery storage system.

It provides energy through a 220 kilovolt transmission line to the Roy Hill mine site, also in the Pilbara. The power station has supplied the region with power for more than 40 years.

It also has an 11.8 per cent stake in the 1380km Goldfields Gas Pipeline, transporting natural gas from Carnarvon basin producers in the northwest of the state to Kalgoorlie in the southeast, that is part of the offer.

The remainder of the pipeline is owned by APA.

The power station is fired by gas and diesel, but is pitched as an energy transition story, with the asset moving towards cleaner fuel. It accounts for about 15 per cent of Alinta’s earnings before interest, tax, depreciation and amortisation.

As of June 2020, Alinta was generating $3.4bn in revenue and $239m of net profit.

Alinta controls 85 per cent of the WA retail energy market and a raft of gas and coal-fired power assets, as well as some renewable energy assets.