Houston, TX-based Cabot Oil & Gas Corp. (NYSE: COG) has executed a 10-year sales agreement to be the exclusive provider of natural gas supplies to Invenergy LLC's Lackawanna Energy Center power plant. Additionally, South Jersey Industries (NYSE: SJI) (SJI), the energy holding company for South Jersey Resources Group LLC, will become a counterparty to both entities through an exclusive supply fuel management service agreement.
The proposed facility is a natural-gas fueled 1,500 megawatt combined-cycle generating station located in Lackawanna County, Pennsylvania and is expected to be one of the most efficient power plants in the United States. Commercial operations are expected to begin in mid-2018 and to reach full-scale operations by year-end 2018. The facility, at maximum capacity, will burn up to 240,000 dekatherms of natural gas per day. Pricing terms are confidential.
Cabot Oil & Gas has core operations in the Marcellus. In the first quarter of 2016, Cabot produced an average 1.6 million cubic feet of natural gas per day from the shale play. According to the company website, Cabot plans to drill approximately 25 net wells in the Marcellus Shale during 2016, with approximately 70% of the company’s capital program allocated to the area.