EPCOR acquires Morris Cogeneration
EDMONTON, ALBERTA - EPCOR Power L.P. and EPCOR Power Equity Ltd., a subsidiary of the partnership announced that a definitive agreement has been signed to acquire 100 per cent equity interest in Morris Cogeneration LLC (Morris facility) from Diamond Generating Corporation and MIC Nebraska, Inc., both wholly owned subsidiaries of Mitsubishi Corporation. The acquisition price is US $77 million, subject to closing adjustments.
The Morris facility is a 177 megawatt (MW) natural gas-fired cogeneration facility located on Equistar Chemicals LP's (Equistar) chemical plant in Morris, Illinois, near Chicago.
The facility began commercial operations in 1998. All of the steam and a portion of the electricity produced from the facility are sold to Equistar under the terms of a long-term energy services agreement which expires in 2023. Equistar, a wholly-owned subsidiary of Lyondell Chemical Company, produces ethylene and its co-products and derivatives including polyethylene plastic, at the Morris facility.
The Morris facility also has an electric capacity agreement with Exelon Generation Company, LLC that terminates in 2011, for capacity and electricity in excess of the needs of Equistar and can participate in the PJM (Pennsylvania, New Jersey, and Maryland) market.
"The acquisition of the Morris facility is an excellent strategic fit and is expected to be modestly accretive to cash flow," said Brian Vaasjo, President of the General Partner of EPCOR Power L.P. "This facility combines the off-gas normally generated by the Equistar production process with natural gas, and efficiently combusts the mixture to simultaneously cogenerate steam and electricity, very similar to other EPCOR operated facilities.
"We understand the technology utilized by this plant, we support the efficiencies attributable to cogeneration, and we propose to add value to the Morris facility by leveraging on the Partnership's operating expertise and capitalizing on growth opportunities within the highly developed geographical area."
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