CALGARY, Alberta (Reuters) - Kineticor, a small privately held power producer, has partnered with one of Canada’s largest pension funds to buy a half-finished oil sands power plant in northern Alberta that was part of an abandoned Royal Dutch Shell RDSa.L project, the company said on Friday.
Alberta-based Kineticor said it had closed the acquisition of the partially constructed 690 megawatt cogeneration plant near Peace River that was part of Shell’s 80,000 barrel per day Carmon Creek project.
Shell called a halt to Carmon Creek in October 2015, blaming lack of infrastructure in western Canada to move crude oil to markets. The company took a $2 billion write-down after it canceled the project in the middle of a two-year slump in global crude prices.
The deal was done in partnership with Ontario pension fund OPTrust and included an agreement between Kineticor and Shell to develop the plant.
Kineticor, which focuses on gas-fired generation and clean energy, plans to repurpose the facility as a standalone power plant and OPTrust has committed C$125 million ($95.43 million) toward development.
The government of Alberta announced in November it was switching to a new power market structure to encourage investment in electricity generation and help meet its renewable energy targets.
Reporting by Nia Williams; Editing by Richard Chang