Enron Capital & Trade Resources (ECT) agreed to acquireCogen Technologies’ interests in three power plants for $1.1billion and the assumption of about $350 million in non-recoursedebt. ECT will make the acquisition through a special purposeentity in which ECT will own a 50 percent interest. The entity willinvest up to $130 million in equity, with the balance of thepurchase price funded by non-recourse borrowings provided byfinancial institutions. The transaction is expected to close inearly 1999.
The three gas-fired plants, in Bayonne, Camden and Linden, NJ,have an aggregate generating capacity of 1,037 MW. Aggregate gasconsumption is 176 million Btu/d. Enron could become involved withmanaging the supply of gas to the plants, a spokesman said.
Designated as qualifying facilities under the Public UtilitiesRegulatory Practices Act of 1978, the plants deliver power andsteam under contract to utility and industrial customers in NewJersey and New York City.
“This investment fits perfectly with ECT’s core strengths inenergy finance and power marketing,” said Kenneth D. Rice, ECT CEO.”In addition to the long-term contracts, which allow us to arrangeattractive financing and provide a stable return to our investors,the quality and locations of the plant sites, at key electricinterconnect points in the Northeast grid, provide opportunities toexpand capacity in one of the most energy-intensive andpower-constrained regions in the United States.”
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