Houston (Platts)--14Feb2012/318 pm EST/2018 GMT

Summit Power Group has signed engineering, procurement and construction contracts that will "guarantee the price" of building its proposed $2.8 billion, 400-MW coal-fired plant with carbon capture technology in Odessa, Texas, it said Tuesday.

The company said signing the contracts takes it "another step closer to financial closing and groundbreaking" on the plant, which has been on the drawing board for several years.

The developer in December finalized a 200-MW, 25-year power deal to sell electricity to CPS Energy, the municipal utility in San Antonio, Texas.

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It also has a contract to sell CO2 for use in enhanced oil recovery and a deal to sell urea, another byproduct of the plant, to a fertilizer producer.

The facility in 2010 was awarded $450 million under the US Department of Energy's Clean Coal Power Initiative.

Summit said it had signed an EPC contract with Selas Fluid Processing, a unit of Germany's The Linde Group, and with Korea's SK E&C, to build a chemical block capable of producing syngas by gasifying Powder River Basin coal and capturing 90% of the CO2 and compressing it for sale to the EOR market.

The second EPC contract is with Germany's Siemens Energy, which is to build a 400-MW combined-cycle power plant capable of operating on syngas and natural gas, Summit said.

A separate 15-year contract was signed with Linde to maintain and operate the 600-acre facility in Penwell, Texas, just west of Odessa in the Permian Basin oil field. Summit said the contracts are valued at $2 billion.

--Jeffrey Ryser, jeffrey_ryser@platts.com

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