Duke in $8.5bn Westcoast deal
Duke Energy is to acquire the Canadian power and gas company Westcoast Energy, in a deal which values the company at $8.5bn. The acquisition will significantly boost Duke’s natural gas business.
Duke will acquire all the outstanding common shares of Vancouver-based Westcoast for a combination of 50 per cent cash and 50 per cent stock. The deal involves Duke assuming debt but the company believes that its credit ratings will be unaffected.
“This acquisition greatly enhances the balance and diversity of our portfolio of energy assets and provides us with additional growth opportunities to serve North America’s growing energy needs,” said Richard Priory, Duke president, chairman and chief executive.
When the transaction is completed in early 2002, Duke will own about 18 000 miles of transmission pipeline, 241bn ft3 of natural gas storage and 58 700 miles of gathering pipeline. It will also own 84 processing facilities and 16 500 miles of distribution pipeline.
Brazil to build 15 more thermal plants
Brazil has added 15 further power plants with a total installed capacity of 4600 MW to its Priority Thermoelectricity Programme bringing the total to 32. Private sector investment will be required to finance the estimated $2.7bn needed for these projects.
The government’s original target of 59 new plants has been scaled back due to the limited supply of natural gas imports from Bolivia. The priority programme’s 32 plants will add 11 000 MW to the country’s energy supplies by 2003.
Engineering group, Alstom, has won a EuroD650m ($585m) order for a multiple unit combined cycle plant in Brazil. The 1000 MW TermoRio plant will supply steam to the Petrobras Reduc refinery.
Alstom will supply six GT11N2 gas turbines, steam turbines, heat recovery steam generators, electrical generators, main mechanical equipment of the power island and control systems. It will also handle design, procurement and contracting for civil works including a high-voltage substation as well as installation of all the equipment at site.
The turnkey contract will be carried out in phases with full commercial operation planned for the beginning of 2004.
AES completes Wolf Hollow financing
AES has achieved financial closing of a $285m bank facility for its 730 MW Wolf Hollow gas-fired combined cycle power plant in Granbury, Texas. The loan was arranged by KBC Bank, N.V. and has resulted in an immediate cash distribution of $177m to AES for the project.
Wolf Hollow is being designed by Enron subsidiary, Nepco, and will be one of the cleanest and most efficient power stations in Texas. The plant features two Mitsubishi 501G gas turbines and two Deltak HRSGs. Construction began in January 2001 with commercial operation forecast for October 2002.
Half the electrical output from AES Wolf Hollow will be sold through a 20-year power purchase agreement with Exelon Generation Company with the remainder being marketed by AES.
AES sells Argentine assets to TotalFinaElf
AES has completed the sale of Hidronequen and Central Puerto to TotalFinaElf. These were two of the three generating assets in Argentina which AES agreed to sell, following the company’s acquisition of Gener S.A. last year. The proceeds of approximately $370m will be used to repay an acquisition loan incurred in connection with AES’s tender offer for Gener.
Naveed Ismail, president and CEO of AES Andes, stated: “We are very pleased to complete these sales which represent a significant milestone in the implementation of our business plan for Gener and are a major step towards re-orienting AES back towards the Chilean power market”. TotalFinaElf has an option to buy the third generator, TermoAndes.
Mexico targets 7222 MW new capacity by 2003
Power-starved Mexico has received a boost with state-owed power company CFE announcing that it will tender 16 generation projects in 2002 and 2003 totalling 7222 MW. CFE envisage investments of $4.5bn which it expects will guarantee power supplies up until 2006. Mexico is seeking to reduce state spending on electricity generation projects and is looking to the private sector to invest $50bn over the next ten years to expand installed capacity to 63 000 MW from the present 36 000 MW.
The CFE will also offer contracts to build 5300 km of transmission lines across the country, worth a total of $1.5bn.
Spanish utility, Iberdrola has already said it will earmark Pta430bn ($2.3bn) for Mexico to build a 5000 MW gas fired combined cycle power plant. Iberdrola has said that its international activity will focus on Mexico along with Brazil, despite slowing economic growth. Mexico’s economy is forecast to grow just 0.5 per cent this year, compared with 6.9 per cent in 2000.
USA: Conectiv has completed the sale of nuclear interests held by its Atlantic City Electric subsidiary to PSEG Nuclear and Exelon Generation. The sale, which consisted of three northeastern nuclear power plants with total capacity of 383 MW, generated $11.3m.
Chile: Santiago-based Enersis plans to invest $200m in Chile as part of a $500-600m power projects investment programme planned for Latin America. Last year, Enersis invested $1.3bn and this year has been concentrating on the construction of a second 1000 MW transmission line, linking the electricity grids of Argentina and Brazil.
USA: PacifiCorp Power Marketing, the non-regulated US arm of ScottishPower, has signed the biggest public utility wind power contract to date in the United States – a 20-year supply deal with Seattle City Light, the municipal utility for Seattle. The deal is understood to be worth $100m over the life of the contract. Seattle City Light will start buying 50 MW of power commencing 1 January 2002, rising to potentially 175 MW from August 2004.
USA: Two Californian wind power projects with a combined capacity of 66 MW have begun commercial operation. The Mountain View wind farms are owned by PG & E and operated by SeaWest WindPower. The Californian Department of Water Resources will purchase the entire output from the projects, both of which utilize Mitsubishi MWT 600 kW wind turbines.
USA: BVZ Power Partners, a joint venture between Black and Veatch and Zachry Construction, has been awarded the EPC contract for the Brazos Valley gas-fired combined cycle plant near Houston, Texas. NRG Energy is building the 600 MW plant which, when complete in 2003, will supply electricity to Reliant Energy.
USA: Alstom has been awarded a contract to supply two heat recovery steam generators for the Sunrise Power Project, a 570 MW combined cycle plant located near Fellows, California. Alstom’s HRSGs will come equipped with supplemental firing as well as NOx and CO emissions control systems.
USA: The Department of Energy has awarded a $12m grant to GE to undertake a 3.5 year programme aimed at commercializing the production of high-efficient generators. Building on its extensive research into high-temperature superconducting materials and generators, the GE-led team aims to improve emissions and reactive power capability of new generators and retrofits.
USA: Calpine Corporation has signed a ¥100bn ($815m) deal to buy 34 steam turbine generators from Toshiba Corporation, ranging from 300 kW to 500 kW.