GDF Suez Partners with China Investment Corp

GDF Suez and China Investment Corp, China’s sovereign wealth fund, have entered into a partnership to pursue deals across Asia in natural gas and power generation.

The initial €2.3bn partnership will see CIC buying a 30 per cent stake in GDF’s gas and oil exploration and production business for €2.3bn as well as its 10 per cent share of a natural gas liquefaction plant in Trinidad and Tobago for €600m.

The world’s biggest utility said the deal would accelerate growth at its exploration and production business primarily by helping to fund large capital projects and tapping fast-growing demand from Asia for liquefied natural gas. The agreement is also a significant step towards GDF’s plan to cut the company's debt by €10bn.

“The Asia-Pacific is clearly a very promising region for gas operations, Gérard Mestrallet, the French company’s executive chairman, said. “It is crucial that a key gas operator like GDF Suez has the means to play an important role in the region.”

Mestrallet said that the stake sale with CIC was only the first part of a broader alliance with the $410bn Chinese fund, which is ready to provide financing across the GDF businesses operating in Asia. The alliance with CIC “can help GDF Suez access substantial incremental financing resources and strong networks in China,” he said.

GDF said the partners had already identified an “attractive pipeline of quality projects in Asia”, which were “open to equity investments by CIC and by Chinese energy groups”.

They are also looking to be involved in the development of “sustainable cities” in China and other energy efficiency projects in Malaysia, Thailand, Singapore.