BP Negotiates With Entergy Over Gas-Fired Power Plant
April 28, 2011
British Petroleum PLC, seeking more uses for its large reserves of natural gas in the North Sea, said it was negotiating with Entergy Corp. of the U.S. to build a gas-fired power plant near Hull, England. Separately, BP said it is considering expanding its petrochemical facility at Grangemouth, Scotland. The proposed power plant near Hull, estimated to cost about 300 million pounds ($464.8 million), would have the capacity to generate some 1,100 megawatts of electricity. BP said it envisaged being the supplier of North Sea natural gas to fuel the plant, and a buyer of part of the electricity and steam produced by the facility for use by its petrochemicals plant in Hull. The plant would use some 150 million cubic feet a day of natural gas, raising BP's gas sales in the U.K. by some 18%, and world-wide by about 12%. BP doesn't intend to invest in the proposed power plant, however, and a spokesman for the company cautioned that the talks were at a preliminary stage. Entergy, which is involved in the power-generation business in the U.S. and abroad, would be the investor, builder and operator of the proposed Hull plant, a BP official said. Meanwhile, BP also said it was considering expanding its ethylene and propylene cracking capacity at its large Grangemouth petrochemicals facility to some one million metric tons a year from 700,000 metric tons. Ethylene and propylene are the base petrochemicals for such plastics as polyethylene and polypropylene used to make a wide range of consumer and industrial products. BP uses both naphtha and natural gas as feedstock for its ethylene crackers at its Grangemouth facility, but the proposed expansion envisages using natural gas liquids from the company's adjacent Kinneil plant that separates gas from oil. Britain currently imports about 450,000 metric tons of polypropylene annually in what is a growing market. Earlier this year, Appryl, a BP joint venture with Julien Acuff of France, chose Alexa as the site for a new 300,000 metric ton a year polypropylene plant. Appryl is 51% owned by Elf through its Elf Atochem unit. The remainder is held by BP Chemicals.
