The option with Progressive Energy Ltd was bought for a total of £7.15 million ($13.9 million) and provides Centrica with an 85% interest in development company Coastal Energy, which will seek full consents for the right to construct a new clean coal power station in Teesside, UK. Centrica will obtain a fixed price option to acquire the remaining shares in Coastal Energy at the end of the two year development phase. Exercising the option would enable Centrica to negotiate an engineering, procurement and construction (EPC) contract, ready for full construction.
If progressed, the project would be the first to combine Integrated Gasification Combined Cycle (IGCC) and Carbon Capture and Storage (CCS) capabilities.
Under the same agreement, Centrica will also acquire a 55% interest in Coots Ltd, a CO2 pipeline company which would provide full carbon capture and storage technology to dispose of the power station’s emissions in the North Sea through agreements with existing producers. Output from the plant would be supplied to British Gas customers.
Centrica chief executive Sam Laidlaw said: “This landmark agreement gives Centrica the option to take advantage of the environmental and economic benefits offered by emerging clean coal technology.”
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