September 25, 2006

Babcock & Wilcox to help SaskPower assess feasibility of near-zero-emission coal plant

Babcock and Wilcox Canada (B&W Canada) and SaskPower have signed an agreement which will significantly advance SaskPower's study of the feasibility of building a near-zero-emissions coal-fired power plant. The terms call for B&W Canada to perform the design and engineering work required to develop a supercritical-pressure pulverized coal-fired boiler. This will help SaskPower assess whether to proceed to the construction phase on the near-zero emissions power station.

Such a facility is expected to greatly reduce greenhouse gas emissions by capturing at least 90% of carbon dioxide (CO2). The recovered CO2 would be sold for enhanced oil recovery operations and eventually sequestrated underground in stable geologic formations.

"B&W has been involved with the International Test Centre (ITC) at the University of Regina for the past few years on CO2 sequestration and clean coal initiatives, which will continue as the project develops. Should the project proceed, Saskatchewan will be the centre of the most advanced coal firing facility in the world," said B&W Canada president Richard Reimels.

"B&W's research and development group has been working on various clean coal initiatives, and specifically OxyFuel technology, and will utilize its expertise to bring world class technology to Saskatchewan," said Don Langley, the company's vice-president and chief technology officer, adding, "The B&W supercritical pressure boiler design provides a high thermal efficiency, further enabling SaskPower to economically maximize the CO2 capture."

The two companies already have agreements in place under which they are working together to develop solutions for improving and rebuilding the existing coal-fired boilers. This long-term relationship, along with the new agreement, provides continued support for B&W Canada's facility in Melville, Saskatchewan. "If a decision is made next July to proceed with building the estimated $1.5 billion facility, we are pleased that major components can be fabricated right here in Saskatchewan, with the economic benefits that brings to both Melville and the province," said SaskPower president and CEO Pat Youzwa.

In other activities, SaskPower reports that it has signed power purchase agreements (PPAs) with NRGreen Power Limited Partnership for three new projects selected during the second phase of the Environmentally Preferred Power (EPP) program. Under the new PPAs, SaskPower will purchase approximately 15.3 megawatts (MW) of electricity from heat-recovery projects to be built at Alliance Pipeline compressor stations near Alameda, Estlin and Loreburn, Saskatchewan. The new projects are expected to come into service between early and mid-2008.

The EPP program is part of Saskatchewan's green power portfolio strategy, whose aim is to ensure that all of Saskatchewan's new electricity needs until 2010 are met from environmentally friendly sources whose operations do not add to greenhouse gas emissions. More information on the EPP program is available on SaskPower's Web site, www.saskpower.com.

NRGreen Power is co-owned equally by Enbridge Income Fund and an affiliate of Fort Chicago Energy Partners L.P. The three new projects will give NRGreen a total of four heat-recovery power plants in the province at compressor station sites along the Alliance Pipeline corridor. The initial project, selected in the first phase of the EPP program, is being built near Kerrobert and should come into service later this fall.

The Alliance Pipeline system runs approximately 3,000 km, transporting natural gas from the western Canadian sedimentary basin to the Chicago market hub. Alliance owns and operates the Canadian portion of the system, consisting of a mainline, approximately 1,560 km in length, and a 730-km lateral pipeline system in northeast BC and northwest Alberta.

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