New Zealand's Contact Energy sells Ahuroa Gas Storage facility for $139.6 MM

(Reuters) — Contact Energy said on Thursday that it would sell its Ahuroa Gas Storage (AGS) facility to Gas Services New Zealand (GSNZ) for NZ$200 MM ($139.60 MM), while retaining usage rights to the facility.

The facility in Taranaki, on New Zealand’s North Island, is used to store gas for use at the Stratford Power Station, which is owned by Contact.

The energy generator and retailer said in a statement that the sale’s proceeds would be used to repay debt and the tax paid on the sale could allow Contact to fully impute the FY2018 target dividend of 32 NZ cents per share.

“I believe with GSNZ as the owner, AGS is more likely to get new customers and we have committed to an initial expansion of AGS to facilitate this,” said Dennis Barnes, Contact’s chief executive.

“We will receive a reduction on our payments to GSNZ as more customers use AGS.”

Reporting by Aaron Saldanha in Bengaluru, editing by Larry King

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