Bahía De Bizkaia Lng Terminal & Combined Cycle Power Plant at the Port of Bilbao (Basque Country – Spain)
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BAHÍA DE BIZKAIA LNG TERMINAL & COMBINED CYCLE POWER PLANT AT THE PORT OF BILBAO (BASQUE COUNTRY – SPAIN) Mr. Javier Aramburu President, Bahía de Bizkaia Gas, S.L. INTRODUCTION In the late 1990’s Spain began to liberalise its energy market. The process commenced within the electricity sector, and resulted in numerous projects for new, Combined Cycle Power Plants. The liberalisation of the gas sector commenced afterwards, and even though the process is making rapid progress, part of the applicable regulations have been developed subsequently. However, new initiatives are also currently arising within the gas sector. Bahia de Bizkaia as a project is taking place against the backdrop of this new energy context in Spain. It comprises the construction, commissioning and operation of a Natural Gas Regasification Plant (Bahía de Bizkaia Gas, or BBG) and a Combined Cycle Power Plant (Bahía de Bizkaia Electricidad, or BBE). The Bahía de Bizkaia project as a whole is headed by four equal partners, all top companies in the energy sector, such as: BP, Iberdrola, Repsol-YPF and Ente Vasco de Energía (the Basque Country’s Regional Energy Agency). They are firmly committed to bringing about this key strategic project, which will secure and guarantee sufficient high-quality Natural Gas-based energy supplies transported by sea, and will make industry more competitive in energy terms by bringing energy production closer to the point of consumption. With investment totalling close to 655 million Euro, the project will strengthen the Spanish gas supply system by creating a new point of entry for gas in northern Spain, to be added to the three existing Regas Plants in Barcelona and Cartagena in the east of Spain, and Huelva in the south, as well as to piped supplies. It will also help provide more energy with greater efficiency and lower technical losses in the Basque Country, which is a major demand area. The facilities will go into operation in 2003, with the Electricity Plant coming on line first (in May 2003), followed by the Regas Plant (in August 2003). The very special circumstances that surround and make up the Project from its very beginning have helped bestow special interest on the same. PROJECT HISTORY Bahía de Bizkaia as a Project involves the construction and Commercial Operations of an LNG Regasification Plant (Bahía de Bizkaia Gas), which will have an annual regasification capacity of 6000 Nm3/h, and an 800 megawatt Combined Cycle Power Plant (Bahía de Bizkaia Electricidad). The starting point for Bahía de Bizkaia lies within the Energy Strategy devised by the Basque Government, which has been brought about by means of several energy plans. As you may already know, the Basque Country is located in the north of Spain, and is characterised by a high demand for energy, as it is a highly industrialised area. Such Energy Strategy had at its basis during the 1980s the premises of energy efficiency, diversification, and the promotion of renewable energy sources, apart from guaranteeing energy supply for the area. One of the first actions resulting from the aforementioned diversification policy was the lying out of the gas network in the Basque Country, which allowed for a decrease in oil reliance, apart from reducing the environmental impact associated to energy usage. Bahía de Bizkaia Gas should be regarded as a further step within such diversification policy, as it will help guarantee gas supply for the Basque Country, as well as reinforce the Spanish Gas System. On the other hand, the liberalisation of the Electricity Market paved the way for another project: the construction of a Combined Cycle Power Plant (Bahía de Bizkaia Electricidad). This was intended to make the most of the possibilities offered by the Regas Plant, as well as benefit from the different synergies between both projects, and help correct the shortage of power production in an area which, as mentioned above, has a great demand for such kind of energy, but not enough generation capacity. After an initial contact by AMOCO, the Basque Government, through its Regional Energy Agency (EVE), carried out the first feasibility studies, which turned out to be positive. As a result, the project went ahead. Two further partners from the electricity and gas sectors respectively were invited to participate in the Project. Such companies were IBERDROLA and REPSOL YPF. BP, IBERDROLA, REPSOL YPF and ENTE VASCO DE ENERGÍA established the twin companies Bahía de Bizkaia Gas y Bahía de Bizkaia Electricidad in April 1998, with equal partnership. From that moment on, the Project started to move on. The EPC Contracts for the Construction of both Plants were signed halfway through the year 2000. A Joint Venture called UTE TIS, made up of Technigaz, Initec y Sofregaz, was awarded the construction of the Regas Plant. Another Joint Venture, called UTE BAIA, made up of Babcock & Wilcox, Abengoa and Idom, was awarded the construction of the Power Plant. The beginning of the year 2001 saw the commencement of construction works. The first tests for the Power Plant commenced in November 2002, and Bahía de Bizkaia Electricidad started its Operations in May 2003. Bahía de Bizkaia Gas is expected to start operating in August 2003. The total investment for the Project amounts to 655 million Euro; 338 million Euro have been invested on the Power Plant (Bahía de Bizkaia Electricidad), and the remaining 317 million Euro have been invested on the Regas Plant (Bahía de Bizkaia Gas). The construction of both Plants has had a relevant and very positive effect on local construction and capital goods companies, apart from helping re-vitalise the industrial and economic network in the surrounding area. A total of 2000 jobs have been created during the construction of the Plants, and 100 direct jobs will be created when the Plants are in operation, apart from other kinds of indirect and induced employment. The case of IZAR shipyard, for example, is worth mentioning in this respect. The shipyard is located nearby, and they have built two methane vessels for the Bahía de Bizkaia project, with investment totalling 400 million Euro, and 3.2 million work-hours associated to them. PROJECT PARTNERS - A PROFILE As mentioned above, BBE-BBG is headed by four leading companies within the energy sector, such as: REPSOL, IBERDROLA, ENTE VASCO DE ENERGÍA (the Basque Country’s Regional Energy Agency) and BP AMOCO. REPSOL is an integrated oil company, devoted to activities in the hydrocarbons sector. It is made up of four main business areas, such as: exploration and production, oil refining and marketing, chemical and gas, and electricity. Within the gas sector, REPSOL acts as a distributor of liquefied gases derived from oil (LPG) through Repsol Butano, S.A., and as a distributor of Natural Gas through Gas Natural SDG, S.A. As a matter of fact, REPSOL is the leading distributor of LPG in Spain, and the second in the world when it comes to packed LPG. REPSOL aims, as its strategic target within the Natural Gas and Electricity sectors, to achieve a full vertical integration of the process, ranging from gas production to the production of power by Combined Cycle Power Plants. Bahía de Bizkaia stands as an obvious example of such objective. IBERDROLA, which has its headquarters in Bilbao, is a leading electricity company in Europe. The bulk of its activity consists of the generation, transportation, distribution and commercialisation of electricity. IBERDROLA is also a relevant figure in some other sectors, such as: alternative energies, Natural Gas commercialisation, Engineering, Consulting, Telecommunications, Information systems, State Agents and Added-Value Services for customers. Such activities are carried out by their Industrial Group. ENTE VASCO DE LA ENERGÍA (EVE), is the Public Agency under Private Law for the Basque Country, which aims at planning, co-ordinating and controlling current and future energy activities for the Public Sector in the Basque Country. In line with this target, it holds a share in Natural Gas transportation, distribution and commercialisation corporations, as well as in some others devoted to hydrocarbons exploration and distribution, renewable energies, geological resources, infrastructure and services and energy efficiency, amongst others. BP AMOCO emerged in 1999 from the merger of BRITISH PETROLEUM, which was established in 1909, and AMOCO, an American oil company created in 1889. The resulting company is now devoted to the exploration and operation of gas and oilfields worldwide. BP AMOCO holds a share in the BBE-BBG Project through subsidiary companies fully owned by them. BP AMOCO is a leading company in the United Kingdom, as well as the leading gas and oil producer in the country, thanks to its offshore oil rigs in the North Sea and the Shetlands. As to the USA, BP AMOCO is one of the largest hydrocarbon producers, on account of its oil rigs in the Gulf of Mexico, Texas and Alaska. It is also the second largest company in terms of gas reserves. With regard to South America, BP AMOCO can be considered as one of the most relevant investors in countries such as Argentina, Colombia, Trinidad-Tobago, and Venezuela. It is worth noticing that the diverse corporate targets detailed above for each one of the Partners has not meant an obstacle to the success of the project. In fact, their unfaltering belief in the need and convenience to execute this joint project has been a determining factor which has allowed the aforementioned project Partners to overcome the obstacles one might expect to find along the way in a Project lead by such four representative companies. A BRIEF TECHICAL PROFILE OF THE PLANTS BAHÍA DE BIZKAIA GAS REGASIFICATION PLANT: The Regas Plant Bahía de Bizkaia Gas will initially process gas from Trinidad-Tobago and Nigeria.