Sojitz joins US power field with planned shale gas plant
Trading house's investment comes at good time for fossil fuels
TOKYO -- Japan's Sojitz will help develop and run a U.S. power plant burning American shale gas, gaining a valuable foothold in an industry set to benefit from looser regulations.
The trading house on Tuesday acquired a 33% stake in Birdsboro Power, a planned natural-gas-fired plant in the U.S. state of Pennsylvania, from American energy investment manager Ares EIF Group. Total project costs will top $500 million, most of which will be borrowed. The plant is to begin operations in spring 2019, producing up to 480,000kW.
U.S. shale gas will fuel the plant, which includes both gas and steam turbines in a so-called combined-cycle arrangement to use that fuel and its waste heat efficiently.
More aging American coal-fired plants are being replaced with modern gas-burning models. The Donald Trump administration has moved to loosen rules covering shale gas development and advance natural gas pipelines through the approval process, helping assure plant operators of a stable fuel supply.
Birdsboro is Sojitz's first power plant investment in the U.S., and among the company's largest worldwide. The project will lift Sojitz's total generating capacity to around 1 million kilowatts when combined with facilities the company operates in regions such as the Middle East and Asia. The trading house aims to catch up to peers that got an earlier start in the power sector such as Marubeni, which runs plants totaling around 11 million kilowatts.