ITOCHU Announces the Commencement of the Construction of the Large Gas Fired Power Plant in Pennsylvania, the United States of America

August 22, 2017

ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Masahiro Okafuji, President & CEO; hereinafter “ITOCHU”) announced today that it has started the construction of Hickory Run Power Plant (hereinafter, “the Power Plant”) in Pennsylvania, the United States of America, through Tyr Energy, Inc. (headquartered in Overland Park, Kansas; hereinafter “Tyr Energy”), a U.S. subsidiary wholly-owned by ITOCHU. Tyr Energy, The Kansai Electric Power Co., Inc. (Shigeki Iwane, President and Director) and Siemens Financial Services, Inc. (headquartered in Iselin, New Jersey; hereinafter “Siemens”) take stakes in the Power Plant 50%, 30% and 20%, respectively.

The Power Plant, located near Pittsburgh, Pennsylvania, is a nominal 1,000 megawatt (MW) natural gas-fired combined cycle power plant with a planned commercial operation date of April 2020. When completed, it is expected to greatly contribute to the area by providing efficient, clean and reliable power. Kiewit Power Constructors Co., which has extensive engineering, procurement and construction (EPC) experience for power projects in the United States of America, is the contractor for the project. The primary equipment to be used includes two Siemens H-class gas turbine generators, two heat recovery steam generators (HRSGs), and a Siemens steam turbine generator.

Tyr Energy has been the 100% owner of the project and has led the development, including EPC contractor and gas turbine supplier selection, PJM auction participation, permitting, contract origination for fuel supply, financing, and other key contracts. BNP Paribas Securities Corp., Bank of America Merrill Lynch and Crédit Agricole Corporate and Investment Bank, together with MUFG, Development Bank of Japan, Sumitomo Mitsui Banking Corporation, ABN AMRO, National Australia Bank, and Shinhan Bank, acted as the coordinating lead arrangers.

The project will provide 500 jobs during the construction phase. After entering its commercial operation, it will produce enough electricity for approximately one million households, which will be provided to the PJM Energy Market, the largest wholesale power market in the U.S. Tyr Energy will provide construction management services during the construction phase and asset management services upon the start of commercial operations. NAES Corporation (headquartered in Washington; hereinafter “NAES”), also a U.S. subsidiary wholly-owned by ITOCHU, will provide operation and maintenance services to the project.

ITOCHU has been actively promoting its power generation business worldwide. Particularly in North America, through Tyr Energy, ITOCHU is currently engaged in the management of 15 operating power plants with a gross capacity of over 9,000 MW. Through NAES, it also provides operation and maintenance services to over 150 power plants globally with a gross capacity of over 39,000 MW, which is the largest scale in the industry as an independent operator of power facilities. ITOCHU will continue to develop the electric power business in a multifaceted manner with the power generation business and the service business, aiming to further enhance its business value.

Outline of the Hickory Run Power Plant Project

Name of power plant Hickory Run Power Plant
Project location Lawrence County, Pennsylvania, U.S.
Power generation type Natural gas-fired combined cycle power plant
Power capacity 1,000 MW
Scheduled commercial operation April 2020
Joint venture Hickory Run Holdings, LLC
Power purchaser PJM Energy Market
Investors ITOCHU Group: 50%
Kansai Electric Power Group: 30%
Siemens Group: 20%

Location of Hickory Run Power Plant