Dynegy announced the sale of all of its gasification assets toCincinnati-based Global Energy Inc. for an undisclosed sum lastweek, effectively exiting the Houston-based company from thegasification business. The sale, which the companies said willclose by the end of the year, is not expected to impact Dynegy’searnings.

Through the transaction, Global Energy Inc., an internationalindependent power producer with over 2,000 MW of project activity,will acquire the Syngas facility at the Wabash River CoalGasification Repowering Project in Terre Haute, IN. Wabash is thelargest operating single train gasification plant in the world.Global also acquired the rights, title and interest in Dynegy’sproprietary gasification technology and the rights to Dynegy’songoing projects. Overall, the Wabash River station generates 262MW, using fuel generated from the gasification process.

“The technology is very promising for converting manycarbon-based fuels into a clean synthetic gas which can be used forpower generation, chemicals and other energy uses. This sale willenable us to place our technology and assets with a company whosestrategic interest is to further develop the technology to its fullpotential at Wabash and subsequent projects,” said Dan Ryser,senior vice president of Dynegy Inc.

Although Dynegy’s merger with Illinova did not directlyinfluence this sale, John Sousa, a Dynegy spokesman, said it had anindirect effect. “The merger signifies our desire to focus onenergy convergence,” he said. “Gasification did not really fit intothat. So, from that perspective, the merger did have a role in thistransaction.” He added that Dynegy first announced intentions toseek strategic alternatives for its gasification operations inApril of 1998.

Besides customary closing conditions, the sale is alsocontingent on the buyout of Dynegy’s gasification services contractby PSI Energy Inc., Cinergy’s corporate parent. The buyout, whichwas agreed to in September of 1998, has been approved by theIndiana Utility Regulatory Commission, Dynegy said, and Global isalready in talks with PSI about entering into a market-basedcontract at the site.

John Norris

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