Conoco plans 420 MW cogeneration facility in Texas

Aug 10, 1999 02:00 AM

Conoco Global Power announced long-term sales agreements and plans to construct a $ 250 mm, 420-MW natural gas-fired, cogeneration plant at DuPont's Sabine River Works facility near Orange, Texas.
Conoco will be project manager during construction. The facility is Conoco's fourth power plant venture since it entered the electric power business. A Conoco affiliate recently executed a long-term contract to sell electric power and 100 % of the new plant's steam capacity to DuPont for its Orange, Texas, nylon intermediates facility.

Also signed was a contract to sell up to 250 MW of capacity for 10 years to PG&E ET, an affiliate of PG&E Corporation of San Francisco. In addition, a turnkey construction contract for the cogeneration plant was signed with Bechtel Energy Corporation. Early construction has begun, and peak activity will involve approximately 350 workers from the Orange-Beaumont area. DuPont will operate the facility, with commercial operations scheduled to begin the summer of 2001. Conoco will secure project financing.
"We're excited to lead the development of a large and highly integrated cogeneration project, " said Ron Walsh, president, Conoco Global Power. "Our focus is on integrating Conoco's diverse strengths in power, natural gas and project management to help DuPont and other customers substantially lower their operating costs.
"Our goal over the next four years is to use a fast-track development process to build at least four to six more large industrial power projects in the United States and Europe that meet growing demand for more efficient, reliable and cleaner energy," Walsh added.
The equipment at the Sabine facility will be similar to that of a 440-MW cogeneration plant that is being completed by Conoco and OxyChem near Corpus Christi, Texas, at Ingleside. This fall, the Ingleside plant is expected to begin supplying power and steam ahead of schedule to the nearby OxyChem chemicals complex.
Both the Ingleside and Sabine cogeneration facilities reflect strong demand for more flexible operations and services in the deregulating electric power industry. In 2001, the Sabine River Works plant will be completely energy self-sufficient with power and steam from the new cogeneration facility, complementing an existing cogeneration unit and industrial boilers.
Also, the sales agreement with PG&E ET includes one of the power industry's longest "tolling" arrangements. The arrangement allows the energy trading company over a 10-year period to pay a "capacity payment" fee in exchange for the Sabine plant converting natural gas to electricity for PG&E ET to sell to its customers.
"The 10-year tolling feature is a product of working closely with PG&E ET," Walsh said. "We're delighted to collaborate this way with our newest customer, while extending our strong relationship with DuPont." Approximately 100 MW of excess electricity from the Sabine plant will be marketed into the South-eastern Reliability Council power pool, which services regions from East Texas to Georgia and Virginia.

Conoco Global Power, headquartered in Houston, is the power subsidiary of Conoco, a major, integrated energy company based in Houston and active in 40 countries.

Source: Business Wire
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