Five electricity-generating facilities planned for local area
Chief Oil & Gas and IMG Midstream announced Wednesday that they have entered into an agreement that calls for the construction of five electricity-generating facilities in an area that is located in Bradford, Sullivan, Susquehanna and Wyoming counties.
The five power generating facilities will be fueled by natural gas produced locally by Chief Oil & Gas, said Kristi Gittins, a spokesperson for Chief Oil & Gas.
The power generating facilities will be much smaller than a traditional power plant, she said.
She said it is her understanding that similar power generating facilities exist in the western part of the United States, but that none currently exist locally.
IMG Midstream, which will build the five facilities, said that it is developing power generation facilities across Pennsylvania, West Virginia and Ohio, each of which will typically produce 20 megawatts of electricity,
By contrast, the planned Panda Liberty power plant in Asylum Township, formerly known as the Moxie Energy plant, will produce 829 megawatts of electricity.
The five planned generating facilities that are included in the Chief-IMG agreement will produce electricity for local use, according to Gittins.
"We're excited" about the agreement, Gittins said.
IMG will build the five facilities near where Chief's producing wells are located, she said.
However, she said she did not know if IMG has decided yet on the specific sites for the power generating facilities.
Chief has "quite a few producing wells" in Bradford County, Gittins continued.
"Since we have so many wells in Bradford County, the likelihood is that (at least) one" of the power generating facilities will be located in Bradford County, Gittins said.
Gittins said she thinks that Chief has more producing wells in Bradford County than in any of the other three counties.
IMG Midstream said that it expects that the agreement will enable it to start construction on up to three of the power generation facilities by the end of 2013.
The five planned power generation facilities will be "fully enclosed" and will minimize impacts to the environment through the use of advanced emission control technology and the use of closed-loop cooling systems, which minimize water consumption, according to a press release issued Wednesday by Chief and IMG Midstream.
The five planned power generation facilities will be located near gas production and existing electric infrastructure, and will have a compact design that will disturb less than two acres of land, the release said.
"Rather than transporting fuels, the core principle behind IMG is the (siting) of gas-fired power generation as close as possible to fuel supply and electricity demand, improving overall market efficiencies and being an important part of the midstream solution," the press release states.
The Chief-IMG agreement provides a long-term natural gas supply, at a pre-determined price, for IMG power projects in the four counties, according to IMG Midstream's website.
"We are excited to construct projects that will use locally produced gas, create new local gas markets and satisfy local electricity needs," Ron Kiecana, managing director at IMG Midstream, said, as quoted in the press release.
If the Chief-IMG agreement works out, it could pave the way for the construction of additional power generation facilities fueled by natural gas from Chief wells, Gittins said.
"Finding additional markets, such as the clean and efficient gas-fired power generation that IMG is providing, will be instrumental in the continued success and prosperity of new US gas supply basins, such as the Marcellus Shale in Northeast Pennsylvania," said Mark Casaday, executive vice-president of PVR Partners L.P., which is involved in the development of the five facilities. PVR owns and operates a network of natural gas midstream pipelines and other coal and natural gas-related facilities.
IMG Midstream, which was formerly known as Iron Mountain Generation, develops, constructs, and operates small-scale, environmentally-friendly power generation projects, the company's website states.
IMG Midstream was founded by Bregal Investments, which is the private equity investment business of COFRA Holding AG, a European holding company for a privately-owned group of companies. Bregal was founded in 2002 to consolidate and grow COFRA's private equity investment activities and has invested over $9 billion globally. The Bregal group includes a number of specialist funds, of which Bregal Partners and Bregal Energy deploy capital across the energy sector, from startups to growth companies.
"This is an important milestone for IMG and we are excited to invest in the business enabling the rollout of multiple power generation assets. We believe that IMG's business model delivers many benefits to energy consumers, gas producers and the environment," said Nathan Campbell, a director of Bregal Energy. "These potential benefits include (the creation of) local jobs, improved reliability, reduced congestion and lower electric costs."
Matthew Tripoli, a spokesman for IMG Midstream, said that at this time, his company would not provide information on the agreement, beyond what is contained in the press release. However, in the next week or so, IMG Midstream will provide further information to the media on the agreement.
James Loewenstein can be reached at (570) 265-1633; or email: email@example.com.