Advantage Oil & Gas Ltd. and Competitive Power Ventures (CPV) announce that the companies have agreed to a long-term gas supply agreement for the recently financed CPV Three Rivers Energy Center (CPV Three Rivers) in Grundy County, Illinois. Advantage will supply 25,000 MMbtu per day of clean, low emissions natural gas for a 10-year period, commencing upon CPV Three Rivers reaching commercial operation in early 2023.
Commercial terms of the agreement are based upon a spark-spread pricing formula, providing Advantage revenue diversification through exposure to PJM power prices, back-stopped with a natural gas price collar which supports Advantage's ongoing development economics. The commencement date of this agreement complements Advantage's existing market diversification strategy, both in term and market access.
Advantage will supply natural gas to CPV Three Rivers from its 400 mmcf/d Glacier Gas Plant located near Grande Prairie, Alberta, in the heart of the Montney fairway. The Glacier Gas Plant is a low emissions facility that incorporates carbon capture and sequestration technology. Advantage's world-class Montney asset has proved gas reserves of approximately 2 trillion cubic feet; this long reserve life, reliable and sustainable energy source will be delivered to CPV Three Rivers on the Alliance Pipeline through Advantage's existing Alliance meter station.
CPV Three Rivers is a state-of-the-art 1,250-megawatt natural-gas-fueled, combined-cycle electric generation facility that will use GE's latest highly-efficient HA turbine technology, enabling unmatched efficiency of greater than 64%, with industry-leading flexibility. By displacing older, less efficient generation, this project is projected to avoid 1.7 million tons of carbon dioxide emissions per year. The availability of flexible, low-emitting resources like CPV Three Rivers is critical to help manage the intermittency of renewable generation and maintain grid reliability. CPV Three Rivers is a critical component to help realize the vision Illinois Governor J.B. Pritzker articulated in his recently announced energy plan for the state.
CPV Three Rivers will sell its power into the PJM market, providing enough power to meet the demand of up to 1.25 million homes and businesses and helping the area transition away from ageing, inefficient power generation facilities. Construction commenced in early January of 2020 and commercial operation is expected to begin in early 2023.
Both CPV and Advantage are pleased to be working together to provide clean, reliable and sustainable power to the PJM region for years to come.