AEP to sell interest in Texas cogen to ConocoPhillips
COLUMBUS, Ohio.– American Electric Power (NYSE: AEP) has reached an agreement to sell its 50 percent interest in the Sweeny Cogeneration plant in Texas to ConocoPhillips for approximately $80 million, including working capital items and the assumption of project debt.
The transaction, which is contingent on federal clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, is expected to close in the fourth quarter.
Sweeny Cogeneration is a nominal 450-megawatt cogeneration plant located within ConocoPhillips’ Sweeny refinery complex approximately 80 miles southwest of Houston. The cogeneration plant began commercial operations in January 1998. AEP is the managing partner of the plant, which is owned by Sweeny Cogeneration LP, a 50-50 partnership between AEP and GE. Under terms of the agreement, ConocoPhillips will acquire AEP’s ownership interests in Sweeny Cogeneration LP.
Proceeds from the transaction will be used to reduce short-term debt and for general corporate purposes. As a result of the sale of the 50 percent interest in the Sweeny plant, AEP expects to record a non-recurring pre-tax gain of approximately $44 million in the fourth quarter.
“Sweeny is a profitable asset for us, but it is our only remaining cogeneration investment after we divested assets that didn’t align with our core utility businesses,” said Michael G. Morris, AEP’s chairman, president and chief executive officer. “We were able to reach an agreement with ConocoPhillips that provides us with a competitive price.”
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