Golar Power announced that it has approved taking a final investment decision (FID) on the Porto de Sergipe project, enabling the project operator CELSE, to enter into a lump sum turn-key EPC agreement with General Electric to build, maintain and operate a 1,516 MW combined cycle power plant in Brazil.
“The executed EPC contract with General Electric, which makes up approximately 80% of the project cost, has been structured on a non-recourse basis to the sponsors Golar Power and Ebrasil with all liabilities limited to the project level (CELSE).”
Located near Aracaju in Sergipe, the BRL4.3 billion (US$1.3 billion) power plant will be the largest thermal power station in South America, Golar said, adding that the project will supplement hydropower during dry seasons and help to meet growing demand for electricity in the region.
Scheduled to deliver power to 26 committed off-takers for 25 years from 2020 in accordance with previously executed PPA contracts awarded by the Brazilian government in 2015, the power project will generate a projected annual EBITDA of BRL1.1 billion.
“In connection with the Sergipe FID, Golar Power has entered into an agreement to charter Golar Nanook, the November 2017 delivering new-build FSRU, for 25 years. The annual EBITDA contribution for Golar Power is currently projected to be US$39 million with upside potential for Golar Power from FSRU capacity not utilised by the Sergipe power plant.”
Golar Power has also increased its ownership in the Sergipe Project from 25% to 50%. Golar LNG has a 50% ownership interest in Golar Power with the remaining 50% is held by Stonepeak Infrastructure Partners. Golar Power will own 50% of the Sergipe project and 100% of the associated FSRU.
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On 28-Sep-2016, GG Power (Golar LNG and Brazil's GenPower Participacoes JV) plans to start construction of its 1,500-MW natural-gas-fired power plant in November.
Site preparation and grading is already underway and physical construction of the $850 million plant and its floating LNG terminal is set to move in little more than a month, said Jose de Oliveira Junior, economic affairs adviser to the Sergipe-state government who hopes the plant will help supplement hydropower during dry seasons and the growing electricity demand of Brazil's power grid.
Planners are also looking to large amounts of discovered but untapped gas off Sergipe's coast to eventually expand gas-fired generation capacity at the same site, he added.
The Port of Sergipe Thermoelectric Plant, slated to be one of the largest gas-fired power generation stations in Brazil, will be fueled by LNG supplied by Exxon Mobil and delivered through a new FSRU facility to be built as part of the project. Located near Aracaju, the state capital, the plant is scheduled to open by 2020 under contracts it won from the Brazilian government at auction in 2015.