Sinopec Group - the parent company of
China Petroleum & Chemical Corp.
) - is looking to purchase an equity stake in the $2.5 billion
Texas clean energy project, the Wall Street Journal has reported.
Total investment, along with contributions from Chinese banks, is
estimated at a maximum of $1 billion.
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Should the transaction go through, it will be one of the biggest by
a Chinese company in the power sector of the U.S. The deal is
expected to be announced in September this year with full financial
details and the size of the stake.
Being developed by Seattle-based Summit Power Group LLC, the Texas
clean energy project (400 megawatt) will be capable of capturing
around 90-99% of carbon dioxide, sulfur dioxide, nitrogen oxide and
mercury created by it. It will be an integrated gasification
combined cycle facility. The project, which has received $450
million in grants from the U.S. Department of Energy, is expected
to be ready by 2015.
Sinopec Group hopes to gain experience in carbon dioxide flooding
through this project, which will enhance its output while
This will not be Sinopec's first overseas acquisition. The company
and its Chinese peer
) have already made major acquisitions in the international oil and
gas sector. During the first half of the year, total Chinese
purchases were $5.1 billion compared to $16.3 billion last year and
$23.4 billion in 2010.
China Petroleum & Chemical Corporation, with its head office in
Beijing, is one of the largest petroleum and petrochemical
companies in Asia. The company recently entered into an agreement
Talisman Energy Inc.
) to buy its 49% equity stake in the UK North Sea assets for $1.5
China Petroleum & Chemical Corporation currently retains a
Zacks #4 Rank (Sell rating) for the short run.