— Construction begins at WA Parish plant near Houston —
Company Website:
http://www.nrg.com
PRINCETON, N.J. & TOKYO -- (Business Wire)
NRG Energy, Inc. (NYSE:NRG), through its wholly owned subsidiary Petra
Nova Holdings LLC, has formed a 50/50 joint venture (together, the
Company) with JX Nippon Oil & Gas Exploration Corporation (JX Nippon),
through its wholly owned subsidiary JX Nippon Oil Exploration (EOR)
Limited, to build and operate the Petra Nova Carbon Capture Project (the
Project). Using proven technology, the Project will be a
commercial-scale carbon capture system that captures 90% of the carbon
dioxide (CO2) in the processed flue gas from an existing unit
at the WA Parish power plant in Fort Bend County, southwest of Houston.
The Company has begun construction on the Project and when complete, the
Project is expected to be the world’s largest post-combustion carbon
capture facility on an existing coal plant.
The WA Parish plant showing the carbon capture facility that will be part of the world's largest post-combustion carbon capture-enhanced Oil Recovery project. The project is expected to be operational by the end of 2016. (Photo: Business Wire)
Through Enhanced Oil Recovery (EOR), the captured CO2 will
create a revenue stream for the Project by increasing domestic oil
production at the West Ranch oilfield, jointly owned by the Company and
Hilcorp Energy Company. EOR is expected to boost oil production at the
field from around 500 barrels per day to approximately 15,000 barrels
per day. The West Ranch oilfield is currently estimated to hold
approximately 60 million barrels of oil recoverable from EOR operations.
NRG and JX Nippon each hold a 25% interest in the oil field through the
Company.
“Our objective is simple: we want to continue to provide safe,
affordable and reliable power to our customers, but without risking the
health of the planet as a result of our activities,” said David Crane,
President and CEO of NRG Energy, “This project is an enormous step in
that direction, plus it continues the trend of enhancing domestic oil
production; thus further reducing our national dependence on foreign
sources of oil.”
“We are very excited and proud to participate in this epoch-making
project in the U.S. which will be able to vitalize the legacy oil fields
and to produce a significant amount of oil that might not have been
produced without this Project, while reducing the footprint to the
global environment at the same time,” said Shunsaku Miyake, President
and CEO of JX Nippon Oil & Gas Exploration Corporation.
Previously the Project was selected by the United States Department of
Energy (DOE) to receive a grant of up to $167 million as part of the
Clean Coal Power Initiative Program (CCPI), a cost-shared collaboration
between the federal government and private industry.
“As part of the President’s all-of-the-above approach to American
energy, the Department is advancing the technologies that will help
ensure we can continue to develop all of our abundant energy resources
responsibly and sustainably,” said Secretary Ernest Moniz in today’s DOE
release. “With coal expected to remain a significant part of the energy
portfolio in the U.S. and internationally, first-of-a-kind projects like
Petra Nova will move us towards a low-carbon energy future.”
The Petra Nova Carbon Capture Project
The Project is expected to capture approximately 1.6 million tons of CO2
annually from an approximately 240 megawatt (MW) slipstream of flue gas
from WA Parish Unit 8, which has a total net capacity of 610 MW. At this
scale, the Project can prove the ability to apply coal-based carbon
capture technology to existing coal-fueled power plants in the U.S. and
around the world. The CO2 will be compressed and piped
through an 82-mile long pipeline to the West Ranch oilfield, the initial
field for the Project.
In the CO2 capture system virtually all sulfur dioxide (SO2)
will be removed from the processed flue gas. Particulate matter and
nitrogen oxide controls are already on the unit and mercury controls
will be installed by 2015 before the capture system becomes operational.
The flue gas leaving the CO2 capture system is expected to be
among the cleanest fossil fuel emissions in the world.
The Project will be constructed under a fixed-price contract by a
consortium of Mitsubishi Heavy Industries Americas, Inc. (MHIA) and TIC
(The Industrial Company). It is expected that construction of the
Project will take approximately two years and the facility will be
operational by the end of 2016.
Carbon Capture Technology
The Project will utilize the proven KM-CDR Process®, which was jointly
developed by Mitsubishi Heavy Industries, Ltd. (MHI) and the Kansai
Electric Power Co., Inc. and uses a proprietary KS-1 high-performance
solvent for the CO2 absorption and desorption. MHI leads the
industry globally with a record of having installed 10 natural gas-fired
CO2 capture facilities currently in operation, plus one under
construction, for chemical plant applications. MHI has also completed 3
years of operation at Southern Company subsidiary Alabama Power’s Plant
Barry, where the carbon capture facility captured over 500 metric tons
of CO2 per day from a pulverized-coal power plant.
Project Financial Information
The overall cost of the Project, including costs already incurred, is
anticipated to be approximately $1 billion.
Financing for the Project will consist of:
-
Up to $167 million from the DOE CCPI grant of which approximately $7
million has already been received from the grant in the initial design
and engineering phase.
-
Loans of $250 million to be provided by the Japan Bank for
International Cooperation (JBIC) and Mizuho Bank, Ltd., backed by
Nippon Export and Investment Insurance (NEXI)
-
Equity contributions from both NRG and JX Nippon of approximately $300
million each. NRG’s contribution will include investments already
incurred during development of the Project which will become assets of
the joint venture. This includes the 75 MW peaking unit that achieved
commercial operation in June 2013 and the 50% equity interest in Texas
Coastal Ventures, LLC (TCV), a joint venture with Hilcorp Energy. TCV
holds the working interests in the West Ranch oilfield in Jackson
County, Texas.
About NRG
NRG is leading a customer-driven change in the U.S. energy industry by
delivering cleaner and smarter energy choices, while building on the
strength of the nation’s largest and most diverse competitive power
portfolio. A Fortune 250 company, we create value through reliable and
efficient conventional generation while driving innovation in solar and
renewable power, electric vehicle ecosystems, carbon capture technology
and customer-centric energy solutions. Our retail electricity providers
serve almost 3 million residential and commercial customers throughout
the country. More information is available at www.nrg.com.
More information about NRG’s carbon capture project can be found at http://www.nrg.com/business/wholesale/carbon-capture/.
Connect with NRG Energy on Facebook and follow us on Twitter @nrgenergy.
About JX Nippon Oil & Gas Exploration Corporation
JX Nippon Oil & Gas Exploration Corporation is a core business company
that engages in oil and natural gas exploration and production (E&P)
business in the JX Group. The JX Group is the leading “integrated
energy, resources and materials business group” in Japan and has net
sales of approximately $120 billion. We are currently expanding crude
oil and natural gas E&P business in 14 countries around the world. In
the U.S., we hold assets in the Gulf of Mexico, which range from the
continental shelf to deep water area, in addition, in Canada,
participate in the Syncrude Project that produces synthetic crude oil
from oil sand, and operate them at Houston office. More information is
available at www.nex.jx-group.co.jp/english.
Safe Harbor Disclosure
This news release contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements are
subject to certain risks, uncertainties and assumptions and include
NRG’s expectations regarding the post-combustion carbon capture unit at
NRG’s WA Parish plant and forward-looking statements typically can be
identified by the use of words such as “will,” “expect,” “believe,” and
similar terms. Although NRG believes that its expectations are
reasonable, it can give no assurance that these expectations will prove
to have been correct, and actual results may vary materially. Factors
that could cause actual results to differ materially from those
contemplated above include, among others, general economic conditions,
hazards customary in the power industry, competition in wholesale power
markets, the volatility of energy and fuel prices, failure of customers
to perform under contracts, changes in the wholesale power markets,
changes in government regulation of markets and of environmental
emissions, and our ability to achieve the expected benefits and timing
of the carbon capture-EOR projects. NRG undertakes no obligation to
update or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. The foregoing review of
factors that could cause NRG’s actual results to differ materially from
those contemplated in the forward-looking statements included in this
news release should be considered in connection with information
regarding risks and uncertainties that may affect NRG’s future results
included in NRG’s filings with the Securities and Exchange Commission at www.sec.gov.
Photos/Multimedia Gallery Available: http://www.businesswire.com/multimedia/home/20140715005632/en/
Contacts:
NRG Media:
Karen Cleeve, 609-524-4608
David Knox, 832-357-5730
or
NRG
Investors:
Chad Plotkin, 609-524-4526
Daniel Keyes,
609-524-4527
or
JX
Tsutomu Okada, +81-3-6275-5241
Manager,
Public Relations
or
Naoyuki Ushijima, +81-3-6275-5241
Senior
Staff, Public Relations
or
Mitsubishi Heavy Industries America
Hirotada
Sakai, 212-969-9000 ext 137
Source: NRG Energy, Inc.
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