Hess (NYSE: HES) has found a development partner for its proposed 655-MW natural gas power plant in Newark, N.J.
Hess said Nov. 14 that it has signed an agreement with a subsidiary of Energy Investors Funds (EIF) develop the Newark Energy Center on a 23-acre brownfield site adjacent to Hess’ Newark petroleum storage terminal. The project’s costs will be shared equally by Hess and EIF-NEC over a three-year period.
No further financial details were released.
EIF-NEC is a subsidiary of private equity funds controlled by EIF. EIF has been the financial partner for a number of power generation units in recent years – such as the Astoria II natural gas plant in Queens, N.Y. EIF announced in October 2011 that it had closed a $1.7bn fund for investments in electric generation and transmission.
The Newark Energy Center will provide much-needed electricity for northern New Jersey and the regional power grid – enough to power more than 700,000 homes, the partners said in a statement.
“When completed, the Newark Energy Center will enhance grid reliability and provide critical energy at a time when many older plants are retiring due to environmental restrictions,” said John Gartman, Senior Vice President, Hess Energy Marketing. “It is a project that Hess has been working on since 2007, and we are pleased to have Energy Investors Funds partner with us to share the investment costs and realize the benefits of the Newark Energy Center,” the Hess official added.
”Hess has done an exceptional job advancing the Newark Energy Center to its current state of development,” said EIF Senior Partner Andrew Schroeder. The EIF official said that the Newark gas-fueled power plant will enjoy a unique, premium location.
Newark plant has picked up key approvals
This spring, Hess project picked up land use approval from Newark’s planning board.
Since then, the project has been issued an air permit by the New Jersey Department of Environmental Protection (NJDEP). That permit, however, has been challenged at the U.S. EPA’s Environmental Appeals Board.
The appeal was filed Oct. 13 by the Ironbound Community Corp. (ICC) and the New Jersey Environmental Justice Alliance (NJEJA).
Hess wants to have the Newark plant operational no later than 2016, following an estimated 30-month construction phase. The company expects to generate 400 temporary jobs during construction and 26 permanent jobs at the plant.
The Newark plant has cleared PJM Interconnection’s base residual auction and will provide capacity to meet demand in the June 1, 2015 to May 31, 2016 delivery year, according to a Hess website.
New York-based Hess is a global integrated energy company engaged in the exploration and production of crude oil and natural gas, refining and marketing refined petroleum products, natural gas and electricity, and power generation.
EIF was founded in 1987 as one of the first private equity fund managers dedicated exclusively to the independent power and electric utility industry. EIF-managed funds own approximately 4,000 MW of capacity in facilities that are currently operating or under construction and an additional 6,000 MW in facilities that are in various stages of development.