ENERGY INDUSTRY REPORT -- Site Selection magazine, September 2006

ENERGY PROJECT ROUNDUP

Energy Plants Race to Meet Global Demand

The heat wave that scorched most of North America this summer was only part of the world's increasing demand for electricity and the fuels that generate it.
   China's surging industrial sector continues to demand ever- larger energy supplies, forcing manufacturers worldwide to pay higher prices for oil and natural gas.
   To meet this tidal wave of demand, companies around the world are embarking on huge energy plant investments. The following projects are some of those that either have been announced or broken ground this year:
   The Chinese central government approved plans by China Petroleum & Chemical Corp. (Sinopec) and Kuwait Petroleum Corp. on July 25 to build a US$5- billion joint- venture refinery in Guangdong Province.
   Hitachi Ltd. and General Electric Co. announced June 25 that they will team up to build two nuclear reactors in Texas as part of a $5.2- billion project. The order for the advanced boiling- water reactors is coming from NRG Energy Inc. of Princeton, N.J., which plans to spend $16 billion over the next decade to develop 10,500 megawatts of new capacity throughout the U.S.
   Bechtel announced May 5 that it will design and build 7,000 megawatts in power- generating plants as part of a $10- billion plan by TXU Corp. to meet rapidly growing demand for electric power in Texas. TXU said it intends to build up to 11 new power units at nine existing power plant sites.
   The Federal Energy Regulatory Commission granted approval July 20 to Colonial Pipeline Company's planned $1- billion expansion of its main petroleum pipeline. One of the largest such systems in the U.S., Colonial's network of pipelines spans more than 5,500 miles (8,850 km.) from Houston, Texas, to Linden, N.J. The company plans to build and operate 500 miles (805 km.) of 36- inch- diameter pipeline from Louisiana to Georgia to transport at least 800,000 barrels per day of petroleum products, a 30- percent increase in capacity. The project will be Colonial's largest system expansion in 44 years, with completion slated for 2010.
   Freeport McMoran Exploration Co. announced July 24 that it had secured U.S. Coast Guard approval to move forward with plans to convert offshore sulfur mines in the Gulf of Mexico to regasify liquefied natural gas and then ship it to onshore pipelines. The $450- million project will take place about 38 miles (61 km.) east of Venice, La.
   SNC-Lavalin Group Inc. announced July 17 that it had signed two contracts totaling $1.3 billion to build a gas- fired electricity plant in Algeria. The Montreal- based firm will provide engineering, procurement, construction, operations and maintenance services on the 1,227- megawatt thermal power plant west of Algiers in the province of Tipaza. Completion is expected in 2008.
   Melbourne- based TRUenergy began construction in mid- June on a $350- million gas- fired power plant in the Illawarra region of New South Wales, Australia. The plant will provide 400 megawatts of power, create 400 jobs during construction, and add 30 full- time jobs upon completion in late 2008.
   Centrica announced June 16 that it will invest $764 million to build Britain's first new power plant in almost five years. The gas- fired power station in Langage, near Plymouth in Devon, will be built and maintained by the French firm Alstom.
   The Ontario Power Authority's recommendation last December that roughly half the Canadian province's electricity should come from nuclear power was formally approved by the Canadian government on June 13. As a result, six sites in Ontario are being considered for new nuclear reactors: Pickering and Darlington, east of Toronto; Tiverton, home to Bruce Power's reactors; Rolphton in eastern Ontario; Nanticoke in southwestern Ontario; and Wesleyville, further east of Darlington.
   Hunt Refining Co. announced July 20 that it plans to double its Tuscaloosa, Ala., refinery's gasoline and diesel production at a cost of $500 million.
   Agri-Ethanol of Raleigh, N.C., announced July 12 that it plans to build at least 20 new ethanol factories along the East Coast, including a $150- million plant in Aurora about 50 miles southeast of Greenville, N.C. Construction is set to start in September on the plant, which will employ 74 workers.
   AES Delano Energy announced June 9 that it will build a 55- million- gallon ethanol plant in Delano, Calif. The Kern County facility will cost $100 million and could be open by June 2008.
   Start- up Community Fuels announced in August it would open a 5- million- gallon biodiesel plant at the Port of Stockton in San Joaquin County, Calif.

– Ron Starner