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ContourGlobal plc has announced it has reached an agreement with Alpek S.A.B. de C.V. to acquire Alpek’s portfolio of two natural gas-fired combined heat and power (CHP) plants, together with development rights and permits for a third plant, for US$724 million in cash.
The portfolio being acquired consists of 932 MW of potential capacity, located on Alpek’s petrochemical sites in the Mexican states of Veracruz and Tamaulipas. 518 MW will be operational by closing, with around 90% of their power plus all steam revenues under long-term contracts.
One plant, located in Cosoleacaque, Veracruz state, has a capacity of 104 MW and entered into commercial operations in December 2014. It provides power and steam to the Alfa Group's adjacent petrochemical plants under 20-year contracts signed in 2014.
The second plant is located in Altamira, Tamaulipas state, adjacent to a petrochemical plant owned by Alpek, and has a projected capacity of 414 MW. Construction commenced in 2016 and commissioning is currently underway with the expected entry into commercial operations in the first half of 2019.
ContourGlobal’s obligation to complete the acquisition is conditional upon this plant successfully completing its commissioning tests and entering into commercial operations. The facility will provide steam production and power output to the adjacent petrochemical plant under a 20-year contract.
Additionally, ContourGlobal will be acquiring the development rights and permits for a third plant with a planned capacity of 414 MW, to be located adjacent to the plant being commissioned in Altamira, providing opportunity for shared supply infrastructure. Certain permits for the plant have already been granted.
ContourGlobal has secured up to US$590 million amortizing project financing to fund the acquisition to be entered into at closing, fully underwritten and led by The Bank of Nova Scotia (Scotiabank).
An additional payment at closing estimated at US$77 million represents the Value Added Tax (VAT) assessed for the transaction and is expected to be refunded in full within 12 months of closing.