Kuala Lumpur : Malaysia's YTL Power has acquired a 30 per cent stake in Estonian state oil company Eesti Energia's oil shale project in Jordan, marking its foray into the upstream oil business, the power producer said on Tuesday.

YTL Power is joining power and utility companies from India, South Korea and Japan in investing in overseas fuel assets to manage the escalating costs of fuel and gas.

Under the agreement, Eesti Energia and its Jordanian partner Near East Investment, along with YTL Power, will develop an oil plant with an output of about 38,000 barrels per day (bpd) and a 900 megawatt oil-shale fired power plant.

"We are going into Jordan on a holistic basis, which means we are going to be involved in every part of the project," YTL Power's Director of Financial Analysis Lucius Chong said.

"This is our first time in the country and the first time we are working with oil shale, which is why we have entered into a partnership with Eestie Energia."

Chong declined to put a specific dollar value on YTL Power's investment into Jordan, but said the project's capital costs is about $5 billion (Dh18.36 billion).

Eestie Energia is the world's largest producer of shale oil. The Estonian government had considered listing a minority stake in the power company, but shelved the IPO due to market instability.

Upstream angle

Chong said YTL Power first became interested in the upstream side of the oil business after acquiring Power Seraya from Singapore's Temasek Holdings in 2008. YTL Power owns and operates about 5,500 megawatts of gas, oil and coal-fired power generation plans in Malaysia, Singapore and Indonesia. It also owns Wessex Water Services, a water and sewerage company in the southwest of England.

"This (the investment in Jordan) fits well with our strategy of investing in natural resource-based energy infrastructure," said Yeoh Seok Hong, executive director of YTL Power, in an e-mailed statement.