French energy group EDF's trading subsidiary EDF Trading has signed a binding agreement to sell its coal and freight business to JERA, the joint venture of Japanese power companies TEPCO (50%) and Chubu (50%) that was created in 2015 to join force in fuel procurement (LNG, oil and coal), upstream development and gas investments.
The transaction will include 100% of the shares of EDF Trading Australia (which holds a 7.5% interest in the Narrabri coal mining joint venture in Australia) and 100% of the shares of Amstuw, which operates the Rietlanden coal terminal in the Netherlands. JERA will also acquire EDF Trading's portfolio and freight transaction; EDF Trading handles around 100 Mt/year of coal (more than 7% of the estimated 1.3 Gt/year worldwide coal trading). EDF Trading’s existing contractual agreement with JERA (2008) will be converted into a minority equity interest in JERA Trading Singapore (33%).
Acquiring coal trading activities from EDF would boost JERA's coal business, whose current coal procurement averages 20 Mt/year, and would make the joint venture a key coal seller in Japan and abroad. The transaction is expected to be completed by April 2017.