Conoco Announces Contracts, New Cogeneration Facility.HOUSTON--(BUSINESS WIRE)--Aug. 10, 1999-- Conoco Global Power, the wholly owned power subsidiary of Conoco (NYSE NYSE See: New York Stock Exchange :COC See chip on chip. ), today announced long-term sales agreements and plans to construct a $250 million, 420-megawatt (MW) natural gas-fired, cogeneration cogeneration In power systems, use of steam for both power generation and heating. High-temperature, high-pressure steam from a boiler and superheater first passes through a turbine to produce power. plant at DuPont's Sabine River Sabine River River, eastern Texas and western Louisiana, U.S. Rising in northeastern Texas, it flows southeast and south, broadens near its mouth to form Sabine Lake, and continues from Port Arthur, Texas, through Sabine Pass to enter the Gulf of Mexico after a course of 578 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 percent of the new plant's steam capacity to DuPont for its Orange, Texas, nylon nylon, synthetic thermoplastic material characterized by strength, elasticity, resistance to abrasion and chemicals, low moisture absorbency, and capacity to be permanently set by heat. After 10 years of research E. I. intermediates facility. Also signed was a contract to sell up to 250 MW of capacity for 10 years to PG&E Energy Trading - Power, L.P. (PG&E ET), an affiliate of PG&E Corporation of San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden . In addition, a turnkey construction contract Turnkey construction contract A type of construction contract under which the construction firm is obligated to complete a project according to prespecified criteria for a price that is fixed at the time the contract is signed. 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 Project financing A form of asset-based financing in which a firm finances a discrete set of assets on a stand-alone basis. . "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 operating costs npl → gastos mpl operacionales . "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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. 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 Corpus Christi is a coastal city and the county seat of Nueces CountyGR6 in the U.S. state of Texas. It is part of the region known as South 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 de·reg·u·late tr.v. de·reg·u·lat·ed, de·reg·u·lat·ing, de·reg·u·lates To free from regulation, especially to remove government regulations from: deregulate the airline industry. 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 Southeastern 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. Note: This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. about Conoco's plans regarding future power projects. These statements are not guarantees of future performance, involve certain risks, uncertainties, and assumptions that are difficult to predict, and are based on assumptions about future events that may not prove accurate. Therefore actual outcomes and results may differ materially from what is expressed in this announcement. Among the factors that could cause such differences are the future price of and demand for electrical power, the future prices of plant fuels, the ability to obtain governmental approvals, and the availability of financing for the projects. These matters are discussed in more detail in Conoco's publicly available filings with the Securities and Exchange Commission.
Sabine River Works Cogeneration Plant -- Fact Sheet
Plant Description Combined-cycle, natural gas-fired
cogeneration
Location DuPont's Sabine River Works Facility near
Orange, Texas
Power Capacity 420 MW
Steam Production Capacity 950,000 pounds
Project Manager Conoco Global Power
Sales to DuPont Power and 100 percent of steam
production
Sales to PG&E ET Up to 250 MW for 10 years
Sales into Power Grid Approximately 100 MW into SERC power pool
Construction Contractor Bechtel Energy Corporation
Construction Start Date August 1999
Peak Construction Workforce 350 workers from the Orange/Beaumont,
Texas, area
Investment $250 million
Expected to be On-Line Summer of 2001
Operator DuPont
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