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BP Whiting Update – NIPSCO Shut out Gasifier purchase

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This topic contains 3 replies, has 1 voice, and was last updated by  Charles Randall 12 years, 8 months ago.

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  • #3671

    Charles Randall
    Participant

    NIPSCO shut out on energy buy
    BY KEITH BENMAN   benman@nwitimes.com 
    Thursday, April 24, 2008

    BP Alternative Energy has reached an agreement to purchase NiSource Inc.’s Whiting Clean Energy electric generating plant at the Whiting refinery for $210 million.

    If the deal is closed, it will end NIPSCO’s plan to buy the plant to make up for electric generating shortfalls it has experienced since the closure of the Dean Mitchell Generating Station in Gary, in 2002.

    NIPSCO still is pursuing plans to buy the Sugar Creek generating plant in southern Indiana, which would provide it with 535 megawatts, according to NiSource spokesman Tom Cuddy. That plant produces enough electricity to power more than 50,000 homes.

    NiSource will use the $210 million from the Whiting Clean Energy sale for capital projects, including the Sugar Creek purchase, Cuddy said.

    NIPSCO also will continue to pursue other options to provide more generating capacity for its 435,000 electric customers, Cuddy said. It makes up for shortages now by purchasing electricity on the open market.

    “We view this transaction as another step in our path forward strategy of creating long-term sustainable earnings growth for our shareholders,” he said.

    BP short-circuited NIPSCO’s plans to buy the Whiting plant by exercising its right of “first refusal” over the sale. That gave BP the right to buy the plant as long as it offered the same price as NIPSCO.

    A NiSource regulatory filing on Tuesday described the agreement between BP and NiSource.

    The purchase of the Whiting Clean energy plant will help BP attain its goal of reducing its carbon footprint, according to BP spokesman Scott Dean. It also will help the plant with its goal of cutting overall emissions during a planned $3.8 billion expansion project, he said.

    The BP plant is gas fired, which makes it far cleaner than coal fired plants and also reduces carbon dioxide emissions.

    BP most likely will put much of the electricity produced on the open market while using the steam produced by the plant for its refining process. BP purchases steam from the plant now under contract with NiSource.

    NIPSCO made its first attempt to purchase the Whiting Clean Energy plant in 2003, but the move met fierce opposition from consumer advocates. They contended the move would foist steep losses incurred at the Whiting plan onto NIPSCO ratepayers.

    NIPSCO and NiSource later dropped the plan.

    But last November, NIPSCO announced it had a deal to buy the Whiting Clean Energy plant from NiSource for $210 million as part of its integrated resource plan to make up for looming energy shortfalls.

    The deal between BP and NiSource must win Federal Energy Regulatory Commission approval before it can be completed. NiSource expects the sale to close in the second or third quarter.

  • #6904

    Charles Randall
    Participant

    Here is update on BP Whiting Nat Gas power plant – NIPSCO was shut out on purchase as BP used it’s first right refusal option. The BP Whiting – Whiting Clean Energy power plant was one of the few NiSource power plants (steel industry connection) that wasn’t spun off several years ago to form Primary Energy (acquired by Epcore in Nov 2006) …… probably because it was so profitable.
     
    When / if BP expansion of Whiting Refinery & Coker goes forward – a petcoke gasification plant is still a possibility by BP or outside interest.  The BP-Husky JV formed last year around BP’s Toledo Refinery to process Husky’s Sunrise Oil Sands Bitumen crude (60MBD in 2012–>200MBD by 2015+) shifted the timelines around on several coker projects (Husky – Lima coker =now an “if”/debottlenecking; Husky – Llyodminster Upgrade coker = delay on timing into 2008; and BP – Whiting coker = delay?).
    Regards
    Charlie Randall

  • #6879

    Charles Randall
    Participant

    I have to share this follow-up article on BP Whiting/NIPSCO/NiSource – with Coking.com folks & it looks like the BP purchase of NG power plant was: 1) great thing for BP to do, 2) bad thing for NiSource & 3) Big missed opportunity for NIPSCO.

     
    NiSource profit falls on sales  
    The Times of Northwest Indiana – May 03 7:27 AM
    MERRILLVILLE || NiSource Inc. profits fell 54 percent in the first quarter, due mainly to a loss recorded for the expected sale of a New England utility and the Whiting Clean Energy  <Use this article link @

    http://www.nwitimes.com/articles/2008/05/03//business/business/docba5ffbbbf652c5af8625743d007139cb.txt >
     
    If the BP Whiting NG Gasifier was this profitable – then the Petcoke Gasifier after BP Whiting’s Refinery & Coker expansion is going to be barn burner! <FYI – BP recently got the state approval on permits, but still has EPA to go & of course Envronmental freaks like NDRC to deal with if they decide go court to block it>
     
    Regards

  • #6746

    Charles Randall
    Participant

    <Here is update on the BP purchase of the Whiting Clean Energy facility – looks like it is finalized. CER>
     
    BP buys clean energy plant for $210m  
    ShareCast via Yahoo! UK & Ireland Finance – Jul 01 10:10 AM
    BP Alternative Energy has bought the Whiting Clean Energy facility from NiSource for $210m.

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