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BG Group plc today announced that it has signed a Sale and Purchase Agreement for the purchase of the Lake Road power plant, an 805MW gas and oil fired combined cycle facility located in Dayville, Connecticut, USA for US$685 million. Closing is expected to occur in the first quarter of 2007, shortly after receiving Federal Energy Regulatory Commission (FERC) and Hart-Scott Rodino approvals.
The Lake Road plant supplies power into the ISO New England (ISO-NE), a well established and liquid power market. It is a modern three-unit facility with the potential for further expansion. Lake Road is BG's second power plant purchase in the region. In October 2006 BG acquired the 170MW combined cycle Dighton power plant in Bristol County, Massachusetts. BG views the ISO-NE as an attractive market given the newly implemented Forward Capacity Market and the rapidly tightening reserve margins in the region.
Martin Houston, Executive Vice President and Managing Director of BG North America, Caribbean and Global LNG said:
"The acquisition of Lake Road represents an important step in the implementation of our integrated US strategy. Lake Road and Dighton have the potential to offer BG attractive returns and will be readily integrated into our growing US gas business."
Notes to Editors:
BG Group is a global natural gas business. Active on five continents in over 25 countries, it operates four business segments - Exploration and Production, LNG, Transmission and Distribution, and Power.
ISO-NE is a regional transmission organisation (RTO), serving Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont.
The Forward Capacity Market (FCM) is a mechanism implemented by ISO-NE to ensure a controlled approach to new generation build in the region. Operational from December 2006, FCM gives a fixed monthly capacity payment to existing generation capacity, this provides an additional revenue stream for Lake Road.
BG Group develops, owns and operates power generation facilities across the globe. It has existing interests in over in 2.75 Gigawatts of power generation capacity across three continents:
Europe and Central Asia
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UK - Premier Power Limited (600MW) - a wholly owned subsidiary of BG Group.
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UK - Seabank Power Limited (1130MW) - 50:50 joint venture with Scottish and Southern Energy.
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Italy - Serene S.p.A. (400MW) BG Group currently holds a 33.68% interest and, in December 2006, agreed to purchase the remaining 66.32% equity share.
Asia Pacific
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Malaysia - Genting Sanyen Power (760MW) - BG has a 20% interest and holds a 21 year contract to sell power to the Malaysian national power company.
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The Philippines - The Santa Rita Power Station (1000MW) - BG Group has a 40% interest and the remaining 60% is owned by First Gas Holdings Corporation.
United States
BG North America
In the USA, BG LNG Services LLC, (BGLS) holds, through 2028, 100% of the capacity rights at North America's largest operating LNG importation terminal, Lake Charles in Louisiana. This facility has the capability to receive, store, vaporise and deliver an average daily send out of 1.8 billion cubic feet per day (bcf/d).
Additionally, BGLS currently holds supply and regasification rights of 446 million standard cubic feet per day (mmscf/d) for 22 years at the Elba Island LNG terminal near Savannah, Georgia. Expansion work is expected to increase its throughput capacity to 1.17 bcf/d from 2012.
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