BOSTONà‚–The Royal Dutch/Shell Group and Bechtel Enterprises Holdings Inc. announced recently an agreement to expand the scope of their InterGen joint venture. The agreement broadens InterGen’s asset portfolio, enhances value through shareholder strengths, and aligns Shell’s energy marketing and trading worldwide with InterGen’s position as a global leader in power generation development.
The agreement will result in the transfer to InterGen of the majority of the natural gas pipeline, storage and power generation assets of Shell’s Coral Energy affiliate in the United States. To strengthen the alignment of assets with marketing and trading in North America, InterGen will own a 30 percent equity interest in Coral Energy, the region’s third largest natural gas marketer and 20th largest power marketer. Globally, the alignment will enable InterGen to leverage Shell’s strengths in both fuel supply and power marketing and trading. Bechtel will continue to be InterGen’s preferred provider of power generation engineering, procurement and construction services worldwide. By contributing these assets, Shell’s ownership in InterGen will increase to 68 percent with Bechtel Enterprises owning the remaining 32 percent.
InterGen has firmly established itself as a world leader in power generation development with groundbreaking projects around the globe. “This transaction represents a significant boost to our plans in the United States,” said Carlos Riva, InterGen president and CEO. “These assets and strengthened alignment with a premier U.S. gas and electricity trading enterprise will provide InterGen a strong platform for growth in the U.S. market.”
“Success in tomorrow’s energy markets will be earned through globally aligned marketing, trading and asset companies,” said Linda Cook, CEO Shell Gas & Power. “That’s critically true in the U.S. and will be the case as competitive energy markets open worldwide. InterGen plans to build a sizeable power generation portfolio in the U.S., working closely with Coral to pursue investment decisions that make the most commercial sense. We expect this relationship to make a significant contribution to both InterGen’s and Coral’s long term success.”
“Shell, Bechtel and InterGen have among them the complete skill set for success in the new global energy market,” said Paul Unruh, Bechtel Enterprises president and COO. “InterGen is a world class power developer with a proven track record of successfully developing, financing and operating projects around the world. Shell is one of the most successful marketers and traders of energy in the US, and is expanding into deregulating natural gas and power markets globally. Bechtel is a global leader in the development, engineering and construction of power facilities. These strengths together create a large power generation platform now directly linked with global energy marketing and trading.”
For Coral Energy, access to an expanding InterGen power generation portfolio will support its growing gas and power marketing and trading business. Coral will participate as part of Shell’s global trading network, working with InterGen as a business partner in the rapid expansion of its asset platform in North America.
Specific assets to be transferred from Coral to InterGen include:
- 4,000 miles of major intrastate gas pipelines in Texas. These pipeline facilities extend from South Texas near the Mexican border along the Texas Gulf Coast to the Louisiana border and north from near Houston to the East Texas producing areas.
- The West Clear Lake Storage Facility, one of the largest natural gas storage reservoirs in Texas, strategically located near the Houston Ship Channel, and leasehold interests in the Stratton Ridge storage facility.
- Subject to equity and regulatory approvals, Coral’s interest, totaling over 500 MW, in four power plants-one in operation and three under construction.
Approximately 230 Coral employees, primarily those related to the Texas-based assets, will join InterGen.
InterGen is operating or building a total of eleven power stations representing 7,985 MW. It also has an additional 7,040 MW in advanced development. InterGen has projects operating, under construction and/or in advanced development in the United Kingdom, the Philippines, Colombia, Mexico, China, Egypt, Brazil, Australia, Turkey and the United States, and is developing projects across the globe.