Abby L. Harvey
GHG Monitor
12/11/2015
Summit Energy, developer of the Texas Clean Energy Project (TCEP), has finalized a consortium engineering, procurement, and construction (EPC) contract with China Huanqiu Contracting (HQC) & Engineering Corp. and SNC-Lavalin Engineers and Constructors Inc. The contract covers engineering, procurement, construction, commissioning, and performance testing of the chemical and carbon capture block for the project. TCEP’s financial closing is expected in 2016.
“We are excited to work with HQC and SNC-Lavalin, and grateful to the U.S. Department of Energy for its continued support. We look forward to achieving financing soon and commencing construction shortly thereafter,” Summit CEO Jason Crew said in a release.
TCEP will be a 400-megawatt coal integrated gasification combined cycle facility, located outside of Odessa, Texas, which will incorporate carbon capture and storage. The project will capture 90 percent of its carbon dioxide emissions, which will be used for enhanced oil recovery in the West Texas Permian Basin and the production of urea fertilizer and other marketable chemicals. The facility would be among the first in the world to use a poly-generation business model, allowing the plant to produce and sell electricity, and provide captured CO2 for use in enhanced oil recovery, urea fertilizer, and other chemicals, resulting in multiple revenue streams for Summit.
HQC, a subsidiary of China National Petroleum Corp., is a leading engineering and construction management company that has completed more than 17 major EPC contracts of this kind. HQC will partner with SNC-Lavalin, which will oversee engineering and procurement for the balance of plant activities outside the licensed technology areas, as well as construction for the entire chemical block portion of the project.
SNC-Lavalin recently came under fire due to delays at SaskPower’s Boundary Dam CCS Project in Saskatchewan, Canada, where the company had a similar role to what it will play in the TCEP project. The Boundary Dam plant began operations six months behind schedule, firing up in October 2014. According to a September briefing note from Mike Monea, president of SaskPower’s carbon capture and storage initiatives, “SNC has delayed our project six months.” The briefing note also accuses SNC of being responsible for “serious design issues with [the] plant” and having “neither the will or the ability to fix some of these fundamental design issues.” Furthermore, the document says, “SNC has been very slow to address basic design problems.”
Due in part to the long negotiating process involved in these contracts, Summit was forced to return to the U.S. Treasury Department $104 million in funds granted under the American Recovery and Reinvestment Act. The funding had a Sept. 30 spending deadline. ARRA funds from three other CCS projects — the FutureGen 2.0 project in Meredosia, Ill.; the Hydrogen Energy California (HECA) project in Kern County, Calif.; and the Lake Charles Clean Energy project in Lake Charles, La. – were also returned to Treasury on Sept. 30.
Land Agreement Extended
The Odessa City Council voted this week to give Summit an extension on the 600 acres of land that has been given to the company for the project. The land agreement would have expired this month, but will now be valid for an additional year. “We are grateful to the Odessa City Council for its continued enthusiasm for our project, exhibited again last night with a unanimous vote to extend our incentives package for another year. This will give us time to get to financial closing and groundbreaking. Without the loyalty and patience of the people of Odessa, Texas, we would not have a project today. It’s the perfect place to build an energy game-changer of this magnitude and complexity,” Laura Miller, Summit Power’s director of projects in Texas, told GHG Monitor this week by email.
