A Calgary-based company that provides on-site power generation to the resources sector has acquired cogeneration units in the Peace River region half-built for Shell's cancelled Carmon Creek oilsands project.
Kineticor Resource Corp. partnered with Ontario pension fund OPTrust to buy the 690-megawatt plant from Shell for an unspecified sum.
Kineticor intends to repurpose the gas-fired cogeneration units as a standalone power facility called the Three Creeks Power Plant.
“We're looking at the 6,000 MW of coal that's potentially coming offline as per the NDP government's plans and this, being a larger gas-fired plant, could be a significant part of that solution,” says Mike Funk, Kineticor's vice-president of business development.
The cogeneration assets were part of Shell’s 80,000 bbl/d Carmon Creek oilsands project. After oil prices collapsed, Shell abandoned the project in October 2015 and announced a resulting $2-billion asset impairment charge.
Kineticor says OPTrust—the pension plan for unionized Ontario public sector and Crown employees, with $18 billion in assets—has agreed to invest $125 million in the company. The acquisition also includes an agreement between Kineticor and Shell for the future development of the plant.
A timeline for the development of the Three Creeks Power Plant is yet to be decided.
“The conditions in the Alberta [power generation] market will dictate what is next for us. The idea is to repurpose the plant, which will involve finishing its construction, but we don't have a defined timeline. We just bought the assets last week,” Funk says.
