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20 April 2004 - Canadian engineering and construction company SNC-Lavalin Group Inc. announced Monday that its wholly owned affiliate, SNC-Lavalin Generation Inc. has signed an agreement to invest $60m in Phase l of a new natural gas power plant in greater New York city as part of a group of Canadian and American investors.
The Astoria Energy project involves the design and construction of a 500 MW natural gas-fired power plant in the Astoria section of Queens, New York. Construction will begin shortly.
The $980m construction financing package for the commissioning of Phase 1 is a combination of approximately $283m in equity investment by the group of investors, and $700m in debt. Once completed in 2006, the facility will provide electrical power for millions of greater New York customers of Consolidated Edison Company of New York (Con Edison), a utility company which will purchase power from Astoria Energy during peak periods under a ten-year agreement.
Engineering, procurement and construction (EPC) of the facility will be carried out by Stone & Webster Inc., a wholly-owned subsidiary of The Shaw Group. In addition to its investment, SNC-Lavalin guarantees, with Shaw, responsibility for Stone & Webster's performance.
"This is a good, strong asset, and reflects our prudent approach to investments," said Pierre Anctil, Executive Vice-President, Investment, SNC-Lavalin Group Inc. "Our investment partners are all well-established and reputable, and power and fuel price risks are mitigated by project agreements, notably the 10-year Con Edison power purchase agreement."
SNC-Lavalin Generation equity partners in Astoria Energy are: CDP Capital-Americas and Energy Investors Funds, on behalf of the United States Power Fund, L.P. SCS Energy LLC and AE Investors LLC are project sponsors, as well as equity partners.
"This investment will provide two sources of revenue for SNC-Lavalin," said Klaus Triendl, Executive Vice-President, Power, SNC-Lavalin Group Inc. and President of SNC-Lavalin International, "dividends on our equity investment, and the compensation we will receive as a corporate guarantor for Stone & Webster's EPC performance."
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