Summit Power Group Announces Signing of EPC Agreement with HQC and SNC-Lavalin for the Texas Clean Energy Project with Financial Closing Expected in Spring 2016
Summit Power Group, LLC (Summit) today announced a major step toward
financing and construction of the Texas Clean Energy Project (TCEP). A
large commercial power and chemicals project near Odessa, Texas, TCEP
will capture more than 90 percent of its CO2 emissions from
coal while producing 400MW of clean power and enough urea to reduce
annual U.S. imports by more than 10 percent. The captured CO2
will be permanently sequestered geologically in West Texas oilfields.
At an event today in Beijing, Summit signed the engineering, procurement
and construction (EPC) contract with China Huanqiu Contracting &
Engineering Corp. (HQC) and SNC-Lavalin Engineers & Constructors Inc.
(SNC-Lavalin). The contract covers engineering, procurement,
construction, commissioning, and performance testing of the chemical and
carbon capture block for the project, which will be integrated with a
Siemens combined cycle power block. Siemens, which has its global Oil
and Gas Headquarters based in Houston, is also expected to supply the
coal gasification equipment for the chemical block.
HQC, a wholly owned subsidiary of China National Petroleum Corporation,
is a leading engineering and construction management firm, operating in
nearly 20 countries, that has completed more than 17 major EPC contracts
for chemical and power-oriented gasification complexes. “HQC is excited
to work with Summit and SNC-Lavalin to pursue this project, which is a
leading example of the clean, low carbon use of domestic coal for the
production of chemicals and power,” said Wang Xinge, CEO of HQC. “In
particular, we look forward to partnering with SNC-Lavalin in
implementing such an important project.”
SNC-Lavalin and HQC have entered into a consortium agreement for the
project. SNC-Lavalin’s major responsibilities include engineering and
procurement for the balance of plant activities outside the licensed
technology areas as well as construction for the entire chemical block
portion of the project. SNC-Lavalin is a world-leading engineering and
construction group with offices in over 50 countries, including the USA
and its Houston office, which will lead the project on SNC-Lavalin’s
behalf. Its 40,000 employees provide EPC and related services to clients
in power, oil and gas, mining and metallurgy and infrastructure. “We see
great potential for the principles of the Texas Clean Energy Project to
reduce carbon emissions in the U.S. and around the world,” said Neil
Bruce, CEO of SNC-Lavalin. “SNC-Lavalin has been active in carbon
capture for years and has implemented real-world deployment of these
technologies, including retrofitting power facilities. Partnering with
HQC and Summit provides a great opportunity for SNC-Lavalin.”
TCEP is a leading carbon capture, utilization and storage (CCUS) project
for the U.S. Department of Energy, which has awarded TCEP more than
$450MM as part of the Office of Fossil Energy (FE) Clean Coal Power
Initiative (CCPI). The project is also the recipient of $811MM in
investment tax credits (ITCs) under section 48A of the Internal Revenue
Code, awarded to qualifying advanced coal projects that generate at
least 400MW of power and capture a minimum of 65 percent of their CO2.
The signing comes 16 months after HQC and Summit launched an effort to
improve the design of the project with a goal of reducing project costs,
which rose sharply in 2013 as a result of soaring Texas labor rates due
to the oil and gas boom. With the completion of updated engineering work
and the addition of SNC-Lavalin to the team, this contract brings that
effort to a successful conclusion. TCEP’s financial closing is targeted
for spring 2016.
“The U.S. and China have a shared opportunity and responsibility to
develop and deploy solutions that help the world transition to lower
carbon energy,” said Summit CEO Jason Crew. “TCEP will demonstrate that
through thoughtful design, proven technologies, and best practices.
Sino-U.S. cooperation not only delivers low carbon power and chemicals
but also supports economic growth and thousands of jobs in both
countries. We are excited to work with HQC and SNC-Lavalin, and grateful
to the U.S. Department of Energy for its continued support. We look
forward to achieving financing soon and commencing construction shortly
thereafter.”
For more information please go to the TCEP website: http://www.texascleanenergyproject.com.
Or contact Laura Miller, Director of Projects, Texas, for Summit
Power Group at lmiller@summitpower.com.
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