security label

GDF Suez, the world’s biggest independent power producer, is to spend up to €55bn ($86bn) globally over five years as it tries to double its size in Asia and cut its reliance on Europe, where it has been locked in dispute with two of its biggest state customers.

Gérard Mestrallet, chief executive, said, in an interview with the Financial Times, that GDF was planning capital spending of between €9bn and €11bn in each of the years between 2012 and 2017, with about a third set aside for emerging markets.

The ambitious plan offers clear evidence that the French-based company intends to continue its recent bout of global expansion. That has included the acquisition last year of the UK’s International Power and this year’s €2.3bn tie-up with China Investment Corporation, the sovereign wealth fund.

GDF had €4.6bn of revenues from Asia last year, but Mr Mestrallet said: “We intend to double approximately our size [there] over the next five years in terms of sales.” The utility, one of the largest shippers of liquefied natural gas, wants to expand rapidly in Asia because of booming demand for gas, particularly in China where consumption is predicted to rise on average by 5.1 per cent each year until 2035.

It is also eager to cut the high proportion of sales it makes in the heavily-regulated European energy market, where GDF has been embroiled in costly disputes with the French and Belgian governments, which together account for half of group revenues.

There was speculation on Thursday night that François Fillon, France’s prime minister, was about to allow GDF increase domestic gas prices after a court ruled that he had acted illegally in freezing the tariff.

However, the price freeze has cost the company almost €400m this year. Mr Mestrallet said he was waiting to see what the government would do “in order to analyse their compliance with the law”. The dispute is unusual because the French state owns 35 per cent of GDF.

Leave a Reply