Calpine Goes Shopping for Turbines, Completes Encal Merger
Calpine announced it will purchase 35 model 7FB and 11 model 7FA gas-fired turbines from GE Power Systems, bringing its total order currently to 203 turbines, which when operated in a combined-cycle application represents 50,000 MW of baseload capacity.
The agreement marks the company's second large volume turbine acquisition from GE and is an important component of its five-year strategic plan to have 70,000 MW of generation on line by the end of 2005. Calpine will take delivery of five turbines in 2002, with the remainder of the contract to be filled by the end of 2005.
"This purchase significantly strengthens Calpine's leadership position in project development," said Doug Kieta, senior vice president-construction for Calpine. "Calpine's aggressive turbine procurement program also strengthens Calpine's first-mover advantage as we expand our development program and enter new electricity markets across the country."
Calpine also locked another 1 Tcf of gas reserves to power the new turbines. The company's previously announced merger with Canadian producer Encal Energy is now completed. The deal required Calpine Canada Holdings Ltd. to issue 16.6 million shares exchangeable into shares of Calpine common stock on a one-for-one basis. In addition, Calpine assumed US$225 million in existing Encal debt. The deal brings Calpine's total gas reserve holdings (proved and probable) to 1.7 Tcf and provides access to firm gas transportation capacity from western Canada to California and the eastern United States. It also includes an accomplished management team to help lead Calpine's business expansion in Canada. The transaction also increases Calpine's net production to 390 MMcfe/d, which would be sufficient to fuel 2,300 MW of generation, the company said.
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