Commercial start eyed for late 2016 on Texas carbon capture project

Carbon capture project at Parish coal-fired power plant slated for 2016 start

NRG Energy (NYSE: NRG) said in its Aug. 4 quarterly Form 10-Q report that it and partners are aiming for a late-2016 commercial start-up of a seminal carbon capture facility (CCF) at NRG's coal-fired W.A. Parish power plant in Texas.

In July 2014, NRG, through its wholly owned subsidiary Petra Nova Holdings LLC, sold 50% of its interest in Petra Nova Parish Holdings LLC to JX Nippon, a wholly owned subsidiary of JX Nippon Oil & Gas Exploration Corp. As a result of the sale, NRG no longer has a controlling interest in and has deconsolidated Petra Nova Parish Holdings LLC as of the date of the sale. In July 2014, NRG said that it made its initial capital contribution into the partnership of $35 million, which was funded with a portion of the sale proceeds of $76 million.

In March 2014, Petra Nova CCS I LLC, a wholly owned subsidiary of Petra Nova Parish Holdings LLC, entered into a fixed-price agreement to build and operate a CCF at the W.A. Parish facility with a consortium of Mitsubishi Heavy Industries America Inc. and TIC-The Industrial Company. Notice to proceed for the construction on the CCF was issued in July 2014 and commercial operation is expected in late 2016.

Petra Nova Parish Holdings LLC also owns a 75-MW, gas-fired peaking unit at W.A. Parish, which achieved commercial operations in June 2013. The peaking unit will be converted into a cogeneration facility to provide power and steam to the CCF.

The CCF project is being financed by:

  • up to $167 million from a U.S. Department of Energy Clean Coal Power Initiative grant;
  • $250 million in loans provided by the Japan Bank for International Cooperation and Mizuho Bank Ltd.; and
  • approximately $300 million in equity contributions from each of NRG and JX Nippon. NRG’s contribution will include investments already made during the development of the project, the Form 10-Q noted.

The Parish CCF project is one of a handful worldwide that is designed to prove carbon capture and sequestration technology. Said the NRG website: "This project is designed to capture approximately 90 percent of the carbon dioxide (CO2) from a 240 MW slipstream of flue gas and use or sequester 1.6 million tons of this greenhouse gas annually. The demonstration project is expected to be operational in 2016.  At 240 MW, Petra Nova WA Parish will be the largest post-combustion carbon capture project installed on an existing coal-fueled power plant. The technology has the potential to enhance the long-term viability and sustainability of coal-fueled power plants across the U.S. and around the world."

The NRG website added: "Captured CO2 will be used to enhance production at mature oil fields in the Gulf Coast region. The first site to use CO2 from the WA Parish carbon capture system is Hilcorp's West Ranch Oil Field. Through EOR, it is expected that oil production will be boosted from around 500 barrels per day to approximately 15,000 barrels per day. This field is currently estimated to hold approximately 60 million barrels of oil recoverable from EOR operations. Other sites have been identified, and reservoir analysis is underway."

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