The company yesterday said it is holding discussions with a "short list" of potential buyers for its BHP Gas Co. unit but declined to identify the suitors due to confidentiality agreements.
Andrea Simpson, BHP Hawaii's vice president of corporate communications, said that the gas utility, also known as Gasco Inc., had been profitable, supplying synthetic natural gas to 115,000 customers statewide.
But Simpson noted that a recent corporate-wide review by parent BHP Petroleum concluded that Gasco wasn't a good strategic fit with BHP's petroleum refining and exploration business.
Different owners may better maximize Gasco's growth potential, the company said.
"It's not a core asset," said Simpson, who stressed that no deal has been finalized.
"We believe that a new owner will be able to focus on growth."
The company notified company employees yesterday of the proposed sale, according to Simpson. BHP also said that it met with Gov. Ben Cayetano and officials with the state Public Utilities Commission last week, she said. Any deal would require PUC approval.
BHP will insist that any buyer must keep Gasco's 310 employees, according to Simpson. Union workers account for 229 of those employees, she added.
BHP Hawaii employs a total of 1,000 workers statewide.
Gasco has offices and distribution facilities on Oahu, Maui, Molokai, Lanai and Kauai. It also operates an synthetic natural gas plant on Oahu that produces 16.7 million cubic feet of gas per day.
For BHP, the sale of Gasco would separate the company from a part of its history.
The predecessor of BHP Hawaii was founded in 1904 as Honolulu Gas Co. by prominent local residents William R. Castle, Albert N. Campbell and William Waterhouse Dimond.
The company at the time produced gas for street lights and gas cooking.
In 1970, the company was renamed Pacific Resource Inc., or PRI. Broken Hill Proprietary Co., BHP's Australian parent, purchased PRI in 1989 in a deal valued at $400 million.
BHP Hawaii's largest division is its petroleum business, which includes gasoline retail operations and the state's biggest refinery.
Gasco would remain a customer of BHP's refinery after the sale, according to the company.