U.S.A./ Insurance for Loans to Carbon Capture Enhanced Oil Recovery Project
Nippon Export and Investment Insurance
Nippon Export and Investment Insurance (NEXI) has decided to provide insurance for loans extended to a carbon capture storage and enhanced oil recovery (“CO2-EOR”) project which will be implemented jointly by JX Nippon Oil & Gas Exploration Corporation (“JX”) and a major US power generation company NRG Energy, Inc.（”NRG”）.
In this CO2-EOR project, a post-combustion carbon capture facility1 will be constructed in the W.A. Parish power plant owned by an NRG subsidiary in Texas. The carbon dioxide captured from the W.A. Parish power plant will be utilized in an EOR flood to recover oil production at the West Ranch oil field in the Texas Gulf Coast region. This EOR operation will start in the fourth quarter of 2016 to significantly increase the current oil production from 500 barrel per day to 12,000 barrel per day on a production period average basis.
USD 250 million of facility will be provided by Japan Bank for International Cooperation (JBIC) and Mizuho Bank Ltd. for Petra Nova Parish Holdings LLC as a borrower formed a 50-50 joint venture between JX and NRG, and NEXI will provide insurance for Mizuho’s financing of USD 75 million.
NEXI will apply the special program for Preventing Global Warming2 to this carbon capture CO2 EOR project as the first transaction. This innovative project is expected to not only expand oil production, but also reduce environmental burdens by cutting carbon dioxide emissions by about 1.6 million tons per year.
Up to USD 167 million will be contributed for this project from DOE Clean Coal Power Initiative grant.
1(Note 1) The carbon capture facility will be constructed by a consortium of Mitsubishi Heavy Industries America, Inc. (a US project company of Mitsubishi Heavy Industries, Ltd.) and The Industrial Company , a major US construction company. The plant will have the world's largest capture and storage capacity of 4,776 tons per day.
2（Note 2） NEXI is providing 100% political risk coverage for certain projects that contribute to reduction of GHG emissions.
NEXI will continue to provide a support to promote global activities of Japanese companies, including their projects contributing to reduction of GHG emissions.
| Lender (Insured) | Mizuho Bank, Ltd. |
| Insured value | USD 75 million |
| Tenor | Approx. 12 years |