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Infrastructure News - January 2007

Wind Energy Infrastructure Gets $10 Billion Boost

Partnering with private industry, Texas plans to reduce pollution while increasing power output with wind energy; also, BNSF Railway Co. may develop intermodal facility at Dallas Logistics Hub.

Private Sector Invests in Wind Energy; PUC to Construct Lines

The state of Texas will partner with private industry to invest more than $10 billion in new wind energy infrastructure that will diversify the state’s energy production and help Texas surpass its renewable energy goals.

Private companies have agreed to the capital investments in wind energy generation while the state’s Public Utility Commission will direct the construction of additional transmission lines to capture and deliver the zero-emission power.

For every 1000 MW generated by new wind sources, Texas will reduce carbon dioxide emissions by six million tons over the next 20 years. Texas has abundant wind energy, particularly in West Texas and along the Gulf Coast. In 2001, Texas added more wind power capacity than all other states combined, and in 2006 Texas surpassed California as the nation’s leader in wind generation capacity. 

The Allen Group, BNSF Railway Negotiating Dallas Logistics Hub Site

The Allen Group, a major developer of logistics parks, industrial and office properties, is working with BNSF Railway Co. to secure an option for the purchase of several hundred acres within the Dallas Logistics Hub in southern Dallas County for the potential construction and operation of an intermodal facility.

The site under consideration fronts on 8,000 lin. ft. of BNSF track in the city of Dallas and represents a portion of the 2.5 mi. of BNSF track frontage within Dallas Logistics Hub. The option term would be for a period of 18 months, during which BNSF would conduct due diligence and market analysis for the feasibility of the potential intermodal facility.

AEP, MidAmerican Energy Form JV to Invest in ERCOT

American Electric Power signed a memorandum of understanding with Des Moines, Iowa,-based MidAmerican Energy Holdings Co. to form a joint venture company to build and own new electric transmission assets within the Electric Reliability Council of Texas.

Under the terms of the MOU, American Electric will contribute its Texas transmission assets currently under construction valued at approximately $100 million to the joint venture. A MidAmerican Energy Holdings Co. subsidiary will make a cash contribution to the joint venture. The equity ownership of the new company would be split 50-50 with an anticipated utility capitalization structure targeted at 40 percent equity and 60 percent debt.

The joint venture intends to invest in additional transmission projects in ERCOT as determined by the board. The companies anticipate up to $1 billion of projects could be included in the new company over the next several years. The joint venture would operate as a transmission utility. Initially, American Electric will act as project manager and will develop, build and operate the transmission lines and facilities for the joint venture.

American Electric’s contribution includes transmission assets already under construction in the Laredo area designed to strengthen transmission grid reliability in South Texas and reduce the need for older reliability-must-run generation in the area. The assets include a variable frequency transformer, a device that will facilitate bidirectional power flow between the U.S. and Mexico transmission grids.

Fluor Selected to Work on $3 Billion Refinery Upgrade

BP Products North America Inc. has selected Irving-based Fluor Corp. for its $3 billion Canadian heavy crude refinery upgrade in Whiting, Ind. Fluor will be in charge of program management, construction management and three major engineering and fabrication packages. The initial award of approximately $300 million was booked in Fluor’s 2006 fourth quarter.

Front-end engineering design is currently under way at Fluor’s Sugar Land office.

Construction on the project is scheduled to begin this year with completion by 2011. The construction workforce at the Whiting site is projected to employ some 2,500 workers.

Freeport LNG Hits Milestone with Lifting of Second LNG Tank Roof

Freeport LNG Development LP completed the lifting of the roof on the second LNG storage tank at its receiving terminal currently under construction on Quintana Island less than 30 days after the roof was lifted on the project’s first tank.

Freeport LNG will own and operate the terminal, approximately 70 mi. south of Houston. Construction of the terminal began January 2005. The first phase of the project includes two 160,000 cu. meter, full-containment tanks, one berth capable of handling LNG vessels up to 260,000 cm, and 1.75 billion cu. ft. per day of vaporization and a 9.4-mi. pipeline.

The terminal is being constructed under a lump-sum turnkey EPC contract with a consortium comprised of Technip USA, Zachry Construction Corp. and Saipem SpA.

Shaw Wins Corps of Engineers ID/IQContract

The Environmental & Infrastructure business unit of Baton Rouge-based The Shaw Group Inc. was awarded a design-build, indefinite delivery/indefinite quantity multiple award task order contract, or MATOC, by the U.S. Army Corps of Engineers, Fort Worth District. Under the MATOC, Shaw may be selected to provide design and construction services for new and existing facilities primarily at Fort Bliss in El Paso, as well as for a nine-state region in the southwestern and western United States.

Shaw is one of three contractors awarded the MATOC, which has a combined overall program ceiling of approximately $100 million and a five-year term. 

BP to Build Gulf of Mexico Fiber Optic Network

BP America Inc. will build an 800-mi. undersea fiber optic system in the Gulf of Mexico to provide continuous broadband connectivity to the company’s offshore oil and gas facilities.

The system will initially link seven of BP’s deep-water production facilities to the new Advanced Collaborative Environment, or ACE, centers in Houston. Each facility will have direct optical connectivity to Houston through two independent routes to ensure continued operations, independent of any other facility in the system, during hurricane events.

BP signed a contract with TYCO Telecommunications to construct the undersea fiber-optic system. The project is planned to be operational late this year.

Houston-Based BTEC Turbines Sells Majority Stake

Houston-based private equity firm, The Sterling Group LP, and The Stephens Group LLC of Little Rock, Ark., have acquired a majority stake in BTEC Turbines LP.

Headquartered in a 200,000-sq.-ft. facility on the Houston Ship Channel, BTEC specializes in the refurbishment, repair and packaging of large gas turbines as well as turnkey power plant design, construction commissioning and support.

Excel is New Terex Finlay Dealer

Amarillo-based Excel Machinery Ltd. is the new dealer for the full line of Terex Finlay screening plants and mobile crushers in Texas, New Mexico and Oklahoma. Excel’s Amarillo facility includes a 64,000-sq.-ft. fabrication shop and 8,400-sq.-ft. parts warehouse. The company also has facilities in Mineral Wells and New Braunfels, as well as sales coverage in El Paso and New Mexico. 


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