Japan's Sojitz Closes US Shale CCGT Deal

Japanese trading group Sojitz Corporation said April 6 it has closed a deal with Ares EIF Management to acquire a 33.33% equity stake in the US shale gas-fired Birdsboro power plant, which is under construction near Pennsylvania’s Marcellus shale.

The Birdsboro power plant will be a 488 MW combined-cycle (CCGT) power plant, Sojitz said April 6. It is expected to begin commercial operations in spring 2019, at which point it will supply energy to the northeastern United States within the PJM market region (originally Pennsylvania-New Jersey-Maryland, now all or parts of 13 states plus the District of Columbia).

This is Sojitz’s first large-scale power plant investment in the North American market. Ares EIF, which will now own the remaining 66.67% in the power plant, is a value-add infrastructure investor with experience in the development and management of power plants within the US.

Recent deal by Osaka Gas

Japanese utility Osaka Gas said March 27 it had agreed to buy interests in two power plants, also in the "PJM" area of the northeast US: a 20% stake in the 725 MW Shore Power Plant in New Jersey that has operated since January 2016, and a 50% stake in the Fairview 1,050 MW plant currently under construction in Pennsylvania and scheduled for start-up in March 2020. Selling the interests are US firm Competitive Power Ventures and others.

The acquisitions will be a "significant addition to the existing portfolio of the power generation assets of over 1GW owned by Osaka Gas in the US," said the Japanese utility, and furthermore "should make an important contribution to environment-friendly supply of electricity fueled by natural gas, replacing aging coal-fired generation facilities." No transaction value was disclosed.

Shardul Sharma