OREANDA-NEWS. TNK-BP and OGK-1 have signed a number of documents on implementation of a joint investment project for construction of a new 800 MW combined cycle power plant at Nizhnevartovsk Gres Power Station. In particular, an agreement on joint implementation of the project was signed, as well as basic terms for shareholders agreements, and gas supply and electric power supply contracts.

Construction of the new power plant will make it possible to ensure a reliable and interrupted supply of power to consumers in Tyumen Oblast in conditions of burgeoning electricity consumption (10% growth in 2006, 4% growth in first eight months of 2007) and a predicted deficit of power generating facilities in the region.

The new power plant, construction of which is planned to start in 2008 and complete in 2010, will contain state-of-the-art combined cycle equipment which will ensure a performance coefficient of up to 57% (this indicator does not exceed 40% in ordinary steam power plants), and will make it possible to save up to 20—25% of fuel, and reduce volume of emissions into the atmosphere by one third.  The facility is included in the General Plan for Electric Power Facilities Development before 2030.

It is planned that TNK-BP and OGK-1 will create a joint venture for implementation of the investment project.  OGK-1 will invest two existing blocks of the Nizhnevartovsk Gres Power Station (1600 MW), and TNK-BP will invest $320 million as charter capital of the joint venture. 

75% of the joint venture will belong to OGK-1, and 25% will belong to TNK-BP.TNK-BP guarantees long-term gas supply for the new electric power plant, and is planning to purchase the electric power produced on a long-term basis.

Thus, preliminary processed dry lean gas supplied by TNK-BP per a 15-year contract will be used as fuel for the power plant.  TNK-BP currently supplies 3 billion cubic meters of gas per year to two existing power plants at the Nizhnevartovsk Gres Power Station, and the new power plant will consume an additional 1.2 billion cubic meters of gas per year.  TNK-BP will also purchase electric power produced at the third plant in a volume of 6 billion kWh per year according to a 15-year contract.

Implementation of the joint project was endorsed by the Board of Directors of United Power Systems of Russia on March 30, 2007 and the TNK-BP Board of Directors on September 27, 2007.

“JSC OGK-1’s strategy is to find and utilize each Gres’ unique competitive advantages.  At Nizhnevartovsk Gres Power Station it’s the closeness of fuel sources and the quickly developing region, and the resulting high demand for electric power. For this project, we are using an innovative mechanism for attracting funds for construction: project financing and involvement of a strategic investor,” noted JSC OGK-1 General Director Vladimir Khlebnikov. Nizhnevartovsk Gres Power Station was the first-born child of the reform.  Thanks to the reform, it became possible to involve private investors in the industry and provide financing of a large-scale investment program.

“Electric power demand currently has a considerable growth potential in the industrial and residential sector in the Tyumen Oblast, and according to the majority of projections, an electric power supply deficit can occur in this region in the near future, and because of this a significant volume of new economical electric power supply sources will need to be constructed.  This region is the center of the oil and gas producing industry (main consumer of electric energy) with a ready natural gas source (produced simultaneously with oil), which is currently being burnt on flares,” stated TNK-BP Executive Director, Gas Business Development, Viktor Vekselberg.