GE to build South America's largest thermopower plant

Monday, October 17, 2016

General Electric will build, maintain and operate South America's largest thermal power station under a deal announced by developer Golar Power on Monday.

The lump sum turn-key EPC agreement will see General Electric cover around 80% of the cost of the US$1.3bn Porto Sergipe combined cycle project in Brazil, according to a Golar statement.

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Golar said the plant would be served by a 25-year charter agreement for the Golar Nanook floating storage regasification unit (FSRU).

Located near the northeastern city of Aracaju, Porto Sergipe will boast installed capacity of 1.516GW when completed in 2020. Golar and its partners secured 25-year power purchase agreements with 26 offtakers at a regulated-market auction last year.

Golar said it also increased its ownership of the project to 50% from 25%, with the final price hinging on the plant's performance.

"The project shows very solid economics and provides a strong financial foundation for [us]," Golar Power CEO Eduardo Antonello said. "We see a huge market to develop cheaper and cleaner energy solutions."

Golar LNG Limited has a 50% stake in Golar Power with the balance held by Stonepeak Infrastructure Partners. Golar Power will own 50% of the Sergipe project and 100% of the associated FSRU.

In March Golar GenPower Brasil Participações signed a framework agreement with ExxonMobil Titan LNG to supply natural gas for the project.

Monday's announcement comes as a natural gas price slump and the low cost of floating import units prompts rising regional interest in LNG as a thermopower fuel source.

Brazil, Chile, Uruguay, Mexico and Colombia are investing or have shown interest in building new LNG import facilities. The region's top LNG exporters are Peru and Trinidad and Tobago.

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