* YTL Power in first foray in upstream oil business
* Jordan shale project's capital cost is $5 billion, says
* YTL Power to develop oil plant with partners
(Adds details, quotes)
By Saumyadeb Chakrabarty and Min Hun Fong
KUALA LUMPUR, Dec 14 Malaysia's YTL Power
has acquired a 30 percent stake in Estonian state
oil company Eesti Energia's oil shale project in
Jordan, marking its foray into the upstream oil business, the
power producer said on Tuesday.
YTL Power is joining power and utility companies from
India, South Korea and Japan in investing in overseas fuel
assets to manage the escalating costs of fuel and gas.
Under the agreement, Eesti Energia and its Jordanian
partner Near East Investment, along with YTL Power, will
develop an oil plant with an output of about 38,000 barrels
per day (bpd) and a 900 megawatt oil-shale fired power plant.
"We are going into Jordan on a holistic basis, which means
we are going to be involved in every part of the project," YTL
Power's Director of Financial Analysis Lucius Chong told
"This is our first time in the country and the first time
we are working with oil shale, which is why we have entered
into a partnership with Eestie Energia."
Chong declined to put a specific dollar value on YTL
Power's investment into Jordan, but said the project's capital
costs is about $5 billion.
Eestie Energia is the world's largest producer of shale
oil. The Estonian government had considered listing a minority
stake in the power company, but shelved the IPO due to market
Chong said YTL Power first became interested in the
upstream side of the oil business after acquiring Power Seraya
from Singapore's Temasek Holdings in 2008.
YTL Power owns and operates about 5,500 megawatts of gas,
oil and coal-fired power generation plans in Malaysia,
Singapore and Indonesia. It also owns Wessex Water Services
Ltd, a water and sewerage company in the southwest of England.
"This (the investment in Jordan) fits well with our
strategy of investing in natural resource-based energy
infrastructure," said Yeoh Seok Hong, executive director of
YTL Power, in an emailed statement.
Malaysian national oil company Petronas has been
active in acquiring overseas upstream energy assets for the
past 15 years, with a third of its revenues and oil coming
from abroad. Asia's state energy companies led by China,
India, South Korea and Japan are also increasingly competing
for assets against oil majors.
European utilities have bought into oil and gas fields in
the North Sea, spurred by high gas and fuel prices and
replacing some of the major oil companies that have dominated
the region since the 1960s.
Earlier this year, Eesti Energia had agreed on a 40-year
concession to exploit oil shale in the Attarat Umm Ghudran oil
shale deposit with the government of Jordan.
Estonia is heavily dependent on oil shale for energy and
its state-owned energy firm is seeking to branch out to other
countries to make use of its oil shale expertise as the
largest processor of oil shale in the world.
Jordan has up to 80 billion tonnes of oil shale, according
to Eestie Energia's website. For more coverage on the future
of shale gas, click on [ID:nN18229665].
YTL Power shares rose 0.4 percent on Tuesday on the local
bourse. They have risen about 8 percent this year, trailing
the 18 percent rise in the broader market .
(Editing by Ramthan Hussain)