Canada’s Centurion Energy International and its joint development partner Caterpillar Power Ventures International have closed a $20.2 million limited-recourse project financing. A London-based bank and a Tunis-based bank each provided $10.1 million of the total credit facility, according to a company press release.
The proceeds of the project financing will be used to fund a portion of the construction costs of a 27 megawatt electric generating power plant currently under construction in south central Tunisia near the port of Zarzis adjacent to Centurion's existing Al-Biban production facility.
The total cost of the power plant is projected to be approximately $29 million. The power plant operating as Societe D'Electricite D'El Bibane (SEEB) is jointly-owned, 50 percent by Centurion and 50 percent by Caterpillar. Construction of the power plant is approximately 70 percent complete with full operations currently scheduled to commence by the end of June 2002.
The power plant is the first power plant in Tunisia to be constructed under legislation allowing independent power operations to utilize natural gas from marginal gas fields. In the case of the Zarzis power plant, in excess of six million cubic feet per day of natural gas from Centurion's Ezzaouia field and Al-Biban field will be used as feed stock for the power plant.
This natural gas is currently being flared. Electricity generated from the plant will be sold to La Societe Tunisienne d'Electricite et du Gaz (STEG), the Tunisian national power company, under a long term power purchase contract.
Approximately three million cubic feet per day of natural gas will be utilized from each of the Ezzaouia field—in which Centurion holds a 31.4 percent working interest—and the Al-Biban field—where Centurion’s working interest totals 73.8 percent. Initial gas deliveries to the power plant will add approximately 525 boepd to Centurion's daily production volumes.
Centurion's share of production is expected to increase over the life of the power plant to approximately 740 boepd, as decreasing volumes supplied by the Ezzaouia field are replaced by higher production volumes from the Al-Biban field. Including Centurion's share of project cash flow after debt service on the power plant and the agreed direct gas price of $0.30 per mmbtu escalating at 1.5 percent per annum, approximately $1.20 per mcf will be realized on gas sales.
Centurion's equity participation in the plant constituted a qualifying investment under the Tunisian Reinvestment Reserve Tax Deferral Plan. This investment extinguished a tax liability due from Centurion to the Tunisian government of approximately $2.8 million.
Centurion and its predecessor company have been active in the oil and gas business in Tunisia since 1994 and operate four producing fields and two exploration permits located on and offshore. Caterpillar Power Ventures International Ltd. develops and invests equity in projects where power generation equipment manufactured by its parent company, Caterpillar Inc., can be utilized.
Caterpillar is one of the world's leading manufacturers of construction and mining equipment, diesel and natural gas engines and industrial gas turbines and power generation equipment. The consortium formed between Centurion and Caterpillar gave the companies an opportunity to provide Tunisia with access to a power solution utilizing natural gas that would otherwise have been flared. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
