BP Amoco and Partners Sanction Major 'Wellhead To Wire' Integrated Energy Project

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23 June 2000

BP Amoco has sanctioned a multi-million dollar investment for the Atlantic Basin's first fully-integrated liquefied natural gas (LNG)-power project, in Northern Spain, it was announced today.

The Bahia de Bizkaia project, in which BP Amoco has a combined 25% interest, is the largest ever investment in the Basque country. The project consists of an 800 megawatt combined cycle gas turbine power plant, a 2.75 billion cubic meter a year (bcma) regasification facility, LNG import terminal and a total of 300,000 cubic meter storage capacity.

The three other partners in the project are Repsol YPF, Iberdrola and EVE, the Basque Energy Authority. Each has 25% equity in the groups that will develop the facilities - the Bahia de Bizkaia Gas group that will develop the regasification plant and the Bahia de Bizkaia Electricidad group that will develop the power station.

Explained President of BP Amoco Global Power, Dr Zin Smati:" This is a further commitment to Spain, an important energy market and one of the fastest growing natural gas markets in Europe. Over the next decade natural gas consumption is expected to double to well over 30 bcma."

He added: " We are grateful to all our partners who have worked very hard to overcome the tremendous challenges to bring this complex project to fruition, the first of its type in the Atlantic Basin, which is growing in importance as a LNG region. The project takes fuel from the wellhead to the transmission wire and with BP Amoco involved in nearly every part of the value chain it demonstrates our full range of skills in integrated energy development."

Bilbao-based contractor Babcock and Wilcox Espanola has been appointed to lead the construction consortium for the power plant. The contract is worth around $310 million. Spanish company Initec will lead the consortium to construct the regasification plant as part of a contract worth some $240 million. Construction is expected to begin towards the end of this year, with the power station due to begin generating by end 2002 and the regasification facility commissioned by mid 2003.
Of the regasification plant's output, 1.1bcma will be supplied to the power plant, 1bcma for Gas de Euskadi, the gas distributor for the Basque country, and 0.6bcma supplied to Repsol. The facility will be designed for potential future expansion to 6bcma.

Earlier this year the Government of Trinidad and Tobago approved a two train LNG expansion project for the Atlantic LNG facility in which BP Amoco and Repsol are shareholders. BP Amoco will supply just over 60 per cent of the natural gas for the two trains. Some 60 per cent of the output of the expanded plant will be sold to Spanish buyers including Repsol SA for use in the Spanish market.

BP Amoco's Gas and Power business stream is committed to developing global market opportunities for the company's natural gas reserves. Spain is a major importer of LNG, and one of the fastest growing gas markets in the Atlantic Basin, with much of the growth tied to expected new gas-fired power generation capacity.

The Bahia de Bizkaia project will generate 2,000 jobs during the construction phase and around 100 when in operation.
BP Amoco is now the second largest non-state producer of natural gas worldwide. Its natural gas revenues exceed $6 billion per year and it has global reserves of 43 trillion cubic feet.

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