Last Friday, AlintaGas reported a net profit of $58.2 million, up 21.2% on 2001 on sales that dropped 6.6% to $377.7 million. The WA gas utility put the result down to lower operating costs and the initial contribution from its subsidiary National Power Services.
With AlintaGas's stock surging 17c to finish at $4.43, which exceeds the $4.36 entry price that Aquila and United Energy paid for a joint 45% stake in the gas utility two years ago, the markets are convinced that the struggling US energy giant will put its stake on the block.
Under pressure from American credit agencies to balance its books, Aquila unveiled plans last May to unload about $US1 billion worth of non-core global assets to reduce debt.
Alinta chief executive Bob Browning said it was up to Aquila and United Energy's independent directors to determine whether their controlling stake in Alinta was up for sale. Last month, AlintaGas said it was considering a buy-out of Aquila's stake in United Energy as a prelude to a possible merger of the two companies' distribution arms.
The good profit result also sparked speculation about a likely bid from Wesfarmers for the gas utility. However, according to one commentator, "the numbers simply don't stack up for Wesfarmers."
One project that seems to casting doubt on Wesfarmers' position on AlintaGas is a joint LPG extraction plant in the southern industrial suburb of Kwinana. Currently, the project is a good money spinner for AlintaGas, which earned $27 million last year despite price volatility of LPG.
This lucrative source of income may vanish in 2005 unless North West Shelf partners agree to extend a 20-year contract to send mandated volumes of LPG to Perth. While it would be a minor setback for Wesfarmers, it would have a much bigger proportional impact on AlintaGas, according to commentators.
AlintaGas may look to plug the earnings gap with a move into electricity generation under an agreement with Alumina giant Alcoa, however this could see it come up against Wesfarmers, which wants to fuel the state's next base load power station with coal from the south-west town of Collie.
AlintaGas claims its co-generation joint venture with Alcoa will curtail the need for a new base-load plant.
