Genesis Energy confirms end to Solid Energy coal contract
Enough coal stockpiled to run Huntly until it closes down.
Genesis Energy [NZX: GNE] confirmed it will terminate its coal supply contract with state-owned coal miner Solid Energy, which was placed into voluntary administration last week ahead of an attempt to sell its assets over the next 2 1/2 years.
Genesis uses coal at its Huntly power station, where it has two 250 Megawatt units capable of running on both natural gas and coal. It plans to close those units by the end of 2018 and already has 720,000 tonnes of coal stockpiled, which along with natural gas supply contracts, is sufficient to run the units for the rest of their operational life.
The electricity generator and retailer confirmed the termination carried no penalty fee, suggesting the contract with Solid Energy had a trigger clause allowing Genesis to terminate the agreement in the event of Solid Energy suffering a material change in its circumstances.
Meridian Energy [NZX:MEL] chief executive Mark Binns yesterday speculated that Genesis may reverse its decision to close the two ageing Huntly units following Contact Energy's decision earlier this week to close down its 400MW gas-fired power station, Otahuhu-B, at the end of next month.
Genesis will not comment on the suggestion, other than to stress the closure will occur "unless market conditions changed significantly."
The shares last traded at $1.75, and have dropped 19% this year.
(BusinessDesk)
Pattrick Smellie
Thu, 20 Aug 2015
Thu, 20 Aug 2015
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Genesis Energy confirms end to Solid Energy coal contract
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