Project Development, Wind Power

Babcock & Brown to Acquire Chemical Facility for Energy Generation

International investment and advisory firm Babcock & Brown yesterday announced the closing of a transaction with Celanese Corp. in which Babcock & Brown intends to develop commercial power generation at the Celanese chemical facility, including possible renewable energy projects.

Babcock & Brown is already developing a 1,000 megawatt (MW) wind energy project in the Central Panhandle, and the baseload power generation at the Celanese site will complement the company’s wind power production, and increase the utilization of transmission lines delivering the power into ERCOT (Electric Reliability Council of Texas).

Celanese will continue operations at the site until at least early 2009, while Babcock & Brown develops the energy projects and ensures the needed transmission lines are built to the region, with the potential for base load electric generation to be operational at the site as early as 2009.

“We are excited about the opportunity to convert the world-class infrastructure at the Celanese facility into a new Pampa Energy Center, potentially including IGCC (Integrated Gasification Combined Cycle) electric generation as well as renewable energy,” said David Parquet of Babcock & Brown.

“New transmission infrastructure is essential to allow all Texans to access the world-class wind resources of the Panhandle, and to allow the existing Celanese infrastructure to help maintain adequate electric generation capacity reserves to meet growing demand,” added Parquet.

Babcock & Brown, Celanese and other companies have advocated that new transmission infrastructure should be built to the Texas Panhandle to connect the region’s vast wind energy resources and new conventional electricity generation with the power grid that serves most of Texas. This grid, known as the Electric Reliability Council of Texas, or ERCOT, currently has only limited connection to the State’s best wind energy areas in the Panhandle.

Last month, the Texas Public Utility Commission (PUC) voted to bring ERCOT access to the Panhandle Region, including the area where both the Celanese site and Babcock & Brown’s wind project are located. New transmission infrastructure serving both wind and non-renewable generation will have a higher utilization factor and thus be more cost-effective than transmission built to serve wind power alone.

Financial details of the transaction were not disclosed.