ERM Power mulls future of NSW gas assets

OREANDA-NEWS.  Australian power and gas group ERM Power is still considering the future of its gas interests in New South Wales (NSW), which include an interest in independent coal-bed methane (CBM) gas developer Metgasco and some exploration areas.

ERM bought a 13pc stake in Metgasco in 2013, but the CBM exploration group has been hampered by a NSW government ruling halting further exploration at the company's Casino project because of community concerns and there has been no resolution to the issue.

"These assets are being impacted by regulatory uncertainty in NSW which, at this point, seems far from being resolved. We will continue to keep these assets on minimum expenditure until investment conditions materially improve," ERM said.

The company also operates its 100pc owned 332MW Oakey peak demand gas-fired plant in Queensland, which was only used 3pc of the time during July-December last year. Oakey reported a 3.8pc fall in revenue from a year earlier to A\$223mn (\$174mn) in the six-month period. There were increased opportunities for Oakey because of higher volatility in electricity prices in Queensland during the 2014-15 summer, ERM said, with electricity spot market prices reaching the maximum price cap of A\$13,000/MWh on numerous occasions.