Alinta Energy has offered AGL $250 million for its ageing Liddell power station in the NSW Hunter Valley.
AGL confirmed on Monday it had received a non-binding and “highly conditional” cash offer from Alinta and its Hong Kong-based owner, Chow Tai Fook Enterprises for the power station and site.
In a statement AGL said it is assessing the proposal but could give no assurance that a deal would result.
Previous media reports had speculated an offer might value Liddell at around $1 billion.
Earlier on Monday an Alinta spokesperson said the offer represents “a compelling commercial proposition for AGL shareholders”.
“We won’t be in a position to comment further until AGL has considered the offer and responded,” the spokesperson told AAP.
AGL has said previously that it has not sought to sell Liddell as it requires the plant to provide energy until 2022 and for repurposing as part of a new generation plan after that date.
The Turnbull government is keen for the station to remain open beyond its slated 2022 closure and has been lobbying AGL to accept a sale.
Federal Energy Minister Josh Frydenberg welcomed the news Alinta has put forward an offer.
“It’s important that AGL gives proper consideration to the offer, given Alinta’s stated intention to continue operating the plant beyond 2022,” he told AAP.
“The government is concerned about the impact on the reliability and affordability of our energy system should Liddell close in 2022.”
Mr Frydenberg said while AGL’s investments in a new 250MW gas peaking plant and 100MW upgrade of Bayswater were welcome, they weren’t enough to fill the gap left by the closure of Liddell.