DONG Energy is acquiring the Severn gas-fired power station project and the engineering business Carron Engineering & Construction from Welsh Power Group.

The Severn power station, which is located in South Wales, is currently under construction and is expected to be commissioned at the end of 2010. The power station will have a capacity of app. 850 MW and at commissioning is expected to be one of the most efficient gas-fired power stations in the United Kingdom. The overall budget for construction of the power station is nearly DKK 5 billion (including DONG Energy's purchase price).

Carron Engineering & Construction (CEC), situated in North Yorkshire in England, provides consultancy services relating to the construction, operation and maintenance of power plants.

“The acquisition of Severn and CEC is in line with our strategy of developing our power production portfolio and complements our existing British wind and gas activities” says Anders Eldrup, CEO of DONG Energy.

DONG Energy already operates two offshore wind farms in the United Kingdom, is constructing a third and has a significant pipeline of UK offshore wind projects. In addition, DONG Energy has considerable UK oil and gas exploration activities, including a number of licenses in the West of Shetland area. Furthermore, a large part of DONG Energy's share of the gas produced from the Norwegian Ormen Lange gas field is sold in the United Kingdom.

The content of this announcement does not alter the profit outlook for the 2009 financial year or the expected capex level announced by DONG Energy on 6 March 2009.

Rothschild acted as financial adviser to DONG Energy on the acquisition.

Tags: DONG Energy