Non-oil energy conglomerate Banpu Plc is preparing to list its subsidiary BKV Corporation on the New York Stock Exchange to grow its businesses in the US and support efforts to cut carbon dioxide emissions.
Banpu's board of directors resolved to approve a plan to offer newly issued ordinary shares in BKV under an initial public offering (IPO) scheme, according to a report submitted to the Stock Exchange of Thailand yesterday.
The company will remain a major shareholder in BKV after the share sale, expected next year, said Somruedee Chaimongkol, chief executive of Banpu.
The push for the IPO in the US is part of Banpu's strategy to expand BKV's business by gaining access to the capital market.
The goal is to help BKV, currently operating an upstream gas business in the US, achieve net-zero emissions by the end of 2025, she said.
Part of a worldwide campaign against global warming, the net-zero target refers to a balance between greenhouse gas emissions and absorption.
Banpu said BKV plans to use money from the IPO to repay a US$75-million loan it took out with Banpu North America Corporation, another subsidiary of Banpu, to fund BKV's acquisition of upstream businesses related to the Barnett shale field. The loan is from Devon Energy Corp.
The company also wants to spend funds raised for other purposes, including the expansion of its carbon capture, utilisation and sequestration business.
Banpu's energy business in the US is expanding.
In May, BKV signed an agreement to buy the natural gas and midstream gas business from XTO Energy Inc and Barnett Gathering Llc, two subsidiaries of Exxon Mobil, for $750 million.
BKV operates gas production in Texas's Barnett shale field and Pennsylvania's Marcellus shale field, with combined production capacity of 700 million standard cubic feet per day (MMSCFD).
The new agreement, with gas production capacity of 225MMSCFD, increases Banpu's total gas production in the US to more than 900MMSCFD.
BKV Corp plans to look for investment opportunities in upstream gas businesses, while another subsidiary, Banpu Power Plc, will look for assets in the gas-fired power plant industry.
