eCORP’s management and professional team have a long standing history of developing and operating electric power generation facilities. Two of eCORP’s key management professionals has have been directly involved in managing the development or operation of more than 15,000 MWs of electric power generation. This experience involved various types of power generation projects including nuclear, coal, oil and natural gas. In addition this experience covers all aspects of power project development and operation including, legal, regulatory, permitting, environmental assessment, engineering/construction contracting and management, schedule and cost control management, fuel procurement, fuel delivery, transmission, distribution and power marketing.
eCORP believes that a distinct advantage results from coupling gas fueled power generation to high performance gas storage. Furthermore, in addition to developing the physical assets, the Company intends to optimize the value of these assets through marketing affiliates by actively marketing and trading the gas and power that is made available. The Company believes that combining merchant activities with project development enhances operational flexibility as well, while increasing profits and ultimately, maximizing project return on investment. This is markedly different than the strategy typically employed by most independent developers, especially in Europe, whereby the vast majority of facility capacity is pre-sold to third parties under long-term agreements prior to construction. eCORP proposes to develop storage project in two phases, not only as a function of construction and permitting issues, but also relative to this marketing and capacity contracting approach. Phase I of eCORP projects will have more conventional long-term contracting, but still with a modicum of merchant content, more like the typical portfolio described above. Over time, and certainly in subsequent Phases of development, merchant content can be increased.
There are many synergies in developing paired gas and power assets including:
Shared Facilities – By sharing pipeline, filtration, separation, compression, measurement and other facilities typically required by both a power plant and a gas storage facility, duplication of such facilities can be avoided and cost reductions can be achieved yielding savings up to 5 – 10 percent of project development cost. Permitting and site complications are also reduced.
Trading / Arbitrage Opportunities – The integration of an “owner’s” marketing capability, within regulatory guidelines, optimizes trading and arbitrage opportunities for these assets. The affiliated marketing operation can economically dispatch, selling whichever commodity or service might be yielding the highest profit(s) at a particular point in time – gas, power, both, or none. In addition, an affiliated marketing team has the resources to provide these products on delivery schedules that yield the highest margin(s) – e.g., so-called “no notice load following” gas and electric power.
Real-Time Gas Delivery and Balancing Solutions – Critical issues relating to real-time deliveries of gas to the generation assets, such as no-notice supply (mentioned above and required for peaking and load following generation) are solved. Balancing and other penalties which may ultimately be imposed by the interconnecting pipelines as liquidity evolves are also eliminated.
Reduced Firm Transportation Requirements – Power projects paired with gas storage can achieve substantial savings due to the reduction or elimination of firm transportation demand charges.
Integrated Risk Management Products – This asset pairing facilitates the marketing of superior bundled physical and financial risk management products in time.
Examples of eCORP’s pairing of U.S. gas storage and power assets in the past include the following locations:
- North Dayton Storage Facility / Houston Lighting & Power
- Spindletop Storage / Sabine Electric Plant
- Stuart Storage Facility / Oklahoma Gas & Electric (Seminole Power Plant)
eCORP is interested in developing and owning power projects globally that provide an opportunity for further infrastructure development and ownership, such as fuel delivery systems and storage, desalination and power transmission.