FirstEnergy Corp. announced Wednesday that it has entered an agreement to sell part of the property and assets at the site of its shuttered Hatfield's Ferry Power Station in southwest Pennsylvania to a New Jersey-based developer that wants to build a large natural gas-fired power plant.

A subsidiary of American Power Ventures LLC (APV) has begun engineering and permitting activities for a 1,000 MW combined-cycle facility on 33 acres at the former coal-fired plant site. FirstEnergy said APV would acquire that property and the former plant's two cooling towers for $40 million if the developer decides to proceed with the gas-fired project. FirstEnergy subsidiary Allegheny Energy Supply Co. LLC entered the sale agreement and would still own 200 acres at the site in addition to other former plant structures.

APV President John Seker said the existing infrastructure at the site and the region's abundant natural gas supply make it an ideal location for the new plant.

If it goes forward, the sale is expected to close in 3Q2018. APV's proposed facility is one of dozens of gas-fired projects planned or under construction in the Appalachian Basin that would use shale gas.

FirstEnergy, which operates 10 electric utilities in six states, is transitioning to a fully regulated company. It closed the Hatfield's Ferry station in Masontown in 2013 because the facility was losing money. Last year it said it wanted out of the competitive power generation business, citing poor results, and it has launched a strategic review to sell gas and hydroelectric units. It also is exploring alternatives for the remaining assets that make up its competitive services segment.

Subsidiaries Allegheny Energy Supply and Allegheny Generating Co. in January reached an agreement to sell 1,572 MW of natural gas and hydro generation assets for $925 million to an affiliate of New York-based power developer LS Power Group. That sale included four gas-fired power plants in Pennsylvania and its interest in a pumped storage hydro facility in Virginia.