Dynegy Sells Gasification Assets
Dynegy announced the sale of all of its gasification assets to
Cincinnati-based Global Energy Inc. for an undisclosed sum last
week, effectively exiting the Houston-based company from the
gasification business. The sale, which the companies said will
close by the end of the year, is not expected to impact Dynegy's
Through the transaction, Global Energy Inc., an international
independent power producer with over 2,000 MW of project activity,
will acquire the Syngas facility at the Wabash River Coal
Gasification Repowering Project in Terre Haute, IN. Wabash is the
largest operating single train gasification plant in the world.
Global also acquired the rights, title and interest in Dynegy's
proprietary gasification technology and the rights to Dynegy's
ongoing projects. Overall, the Wabash River station generates 262
MW, using fuel generated from the gasification process.
"The technology is very promising for converting many
carbon-based fuels into a clean synthetic gas which can be used for
power generation, chemicals and other energy uses. This sale will
enable us to place our technology and assets with a company whose
strategic interest is to further develop the technology to its full
potential at Wabash and subsequent projects," said Dan Ryser,
senior vice president of Dynegy Inc.
Although Dynegy's merger with Illinova did not directly
influence this sale, John Sousa, a Dynegy spokesman, said it had an
indirect effect. "The merger signifies our desire to focus on
energy convergence," he said. "Gasification did not really fit into
that. So, from that perspective, the merger did have a role in this
transaction." He added that Dynegy first announced intentions to
seek strategic alternatives for its gasification operations in
April of 1998.
Besides customary closing conditions, the sale is also
contingent on the buyout of Dynegy's gasification services contract
by PSI Energy Inc., Cinergy's corporate parent. The buyout, which
was agreed to in September of 1998, has been approved by the
Indiana Utility Regulatory Commission, Dynegy said, and Global is
already in talks with PSI about entering into a market-based
contract at the site.
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