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ENRON/KENETECH CONSORTIUM COMPLETES FINANCING OF PUERTO RICO POWER PROJECT
FOR IMMEDIATE RELEASE: Monday, December 15, 1997
HOUSTON -- Enron International, a wholly-owned subsidiary of Enron Corp., (Enron) and KENETECH Energy Systems, Inc., a wholly-owned subsidiary of KENETECH Corporation, (KENETECH) announced today that financial close has been achieved on the $670 million EcoEléctrica LNG Terminal and Cogeneration Project. Enron and KENETECH jointly developed and each own 50 percent of the project, which will be located in the Peñuelas/Guayanilla area on the south coast of Puerto Rico.
The power plant portion of the project, an approximately 500 megawatt combined cycle power facility, will be fueled primarily by liquefied natural gas (LNG). The LNG will be imported from Trinidad under a long term contract with Cabot LNG and delivered at the project's receiving terminal which includes a pier, docking and unloading facilities, and a one million barrel LNG storage tank. When completed, the project will be the first in the world to combine a private power plant and an LNG terminal as part of the same project financing. It will also be the first opportunity for natural gas -- the cleanest of all fossil fuels -- to be used to generate electricity in Puerto Rico, which presently uses oil for 98% of its power generation. Construction activities will begin immediately, with commercial operations slated for the 4th quarter of 1999.
Power produced by the facility will be sold solely to the Puerto Rico Electric Power Authority (PREPA) under a 22 year power purchase agreement. Miguel A. Cordero, executive director of PREPA, considers the culmination of this financial process to be a solid step towards the diversification of sources of electricity, a principal goal of the authority.
"The construction of the EcoEléctrica Project will not only provide our system with additional highly reliable capacity to meet the increasing demands for the next century, but will mark a historic moment in the development of our electrical system, which frees us of the dependency on oil," Cordero stated.
In addition to the power plant and the LNG facility, the EcoEléctrica Project includes a desalination plant that will utilize waste heat to produce approximately two million gallons of clean water per day for use in the power plant and to supplement the public water supplies in the area. The project will generate over 500 jobs during the construction phase and contribute significantly to the local economy.
"We are very pleased we are getting an opportunity to contribute to the island's fuel diversification and to the revitalization of the Peñuelas/Guayanilla area," said Mark Lerdal, CEO and president of KENETECH Corp.
"We are also very pleased to see this project brought to financial closure and construction underway," said Rebecca P. Mark, chairman and CEO of Enron International. "It will provide a clean, reliable and economically attractive power source for Puerto Rico and significantly reduce greenhouse gases and other pollutants on the island."
The project will be constructed on a turnkey basis by an Enron affiliate. As part of the financial closing, KENETECH's CNF Industries subsidiary sold its 50% interest in the construction contract to Enron for $15 million plus accrued expenses. Approximately $600 million of non-recourse construction and permanent financing for the project is being provided on a fully underwritten basis by ABN AMRO Bank and Bank Paribas.
Enron Corp., one of the world's largest integrated natural gas and electricity companies with approximately $23 billion in assets, operates one of the largest natural gas transmission systems in the world; is the largest marketer of natural gas and electricity in North America; is a leading participant in liberalized energy markets in the United Kingdom and the Nordic Countries; markets natural gas liquids worldwide; manages the largest portfolio of fixed-price natural gas risk management contracts in the world; is among the leading entities arranging new capital to the energy industry; owns a majority interest in Enron Oil & Gas Company, one of the largest independent (non-integrated) exploration and production companies in the United States; owns and manages operating power plants and natural gas pipelines around the world; is one of the largest independent developers and producers of electricity in the world; and is a major supplier of solar and wind energy worldwide. Enron's internet address is www.enron.com and its common stock is traded under the ticker symbol, "ENE."
For additional information please contact:
Margarita Bernal
(713) 853-7161
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