An advanced low-carbon gasification power plant in California, USA, is to move forward with a new backer after SCS Energy agreed to take over the project from its original investors.

SCS Energy, an independent power producer, has reached a deal with BP and Rio Tinto to buy Hydrogen Energy California (HECA) and to take the project through the permitting and construction phases to operation.

SCS says that it intends to modify the project in order to add polygeneration capabilities.

The deal leaves BP with just one hydrogen power project under development – a 400 MW plant in Abu Dhabi that it is developing in conjunction with Masdar.

The 400 MW HECA project will gasify petroleum coke into hydrogen and carbon dioxide (CO2). The hydrogen will be used to generate electricity while the CO2 will be captured and used for enhanced oil recovery (EOR).

SCS Energy is now proposing to modify the project into a polygeneration plant, producing urea as well as electricity.

Around 90 per cent of the CO2 generated by the plant will be captured and sequestered in EOR operations, says SCS.

“Both companies are pleased to see SCS Energy develop the project in a way that will create value for its core business,” said Jonathan Briggs of HECA.

The SCS deal comes after BP and Rio Tinto began discussions earlier this year with the US Department of Energy (DOE) over how best to sustain the project upon their exit. They had each invested $55 million in the project, while the DOE had invested $54 million under a financial assistance agreement.

DOE is working with BP, Rio Tinto and SCS Energy to build on this investment and ensure HECA can access the remaining $354 million in financial assistance under HECA’s Clean Coal Power Initiative (CCPI-3) award.

In 2008 the BP-Rio Tinto joint venture axed plans to build a pioneering coal fired gasification power plant equipped with carbon capture and storage (CCS) in Australia.

BP’s proposed gasification plant in Abu Dhabi has been the subject of delays. BP says that it is ready to proceed with issuing an engineering, procurement and construction (EPC) contract to market once commercial arrangements with offtakers have been finalised.