(Adds detail on Rockgas’s interests, support services agreement, background)
July 31 (Reuters) - Contact Energy Ltd said on Tuesday it will sell Rockgas Ltd, which holds the company’s LPG business, to an associate of First Gas Ltd for NZ$260 million ($177.35 million) in cash.
As a part of the deal, Contact will enter into an exclusive marketing agreement with First Gas associate Gas Services NZ Midco Ltd that will allow it to continue to offer LPG to mass market customers.
In addition to the LPG operations, Rockgas also has a 50 percent stake in Rockgas Timaru Ltd and a 8.5 percent interest in Liquigas Ltd.
Contact will provide support services to Rockgas for mass market customers for a yearly fee of NZ$2 million, the Wellington-based company said in a statement.
Acquired from Origin Energy for NZ$156 million in 2007, Rockgas supplies over 88,000 customers through its network.
Last year, Contact Energy had said it would sell its Ahuroa Gas Storage facility to Gas Services New Zealand for NZ$200 million, while retaining usage rights to the facility.
$1 = 1.4661 New Zealand dollars Reporting by Aditya Soni in Bengaluru; Editing by Grant McCool