Dresser-Rand Awarded Compressed Air Energy Storage (CAES) Project
Dresser-Rand Introduces SMARTCAES™ Technology
Total Project Value Approximately $200 Million
HOUSTON, July 1, 2013 /PRNewswire/ -- Dresser-Rand Group Inc. ("Dresser-Rand" or the "Company") (NYSE: DRC) announced today that it received a project award from Apex Compressed Air Energy Storage, LLC ("Apex") for the supply of equipment to be used in a new 317 MW compressed air energy storage ("CAES") facility to be constructed near Tennessee Colony, Texas in the Electric Reliability Council of Texas ("ERCOT") market. The Apex Bethel Energy Center would be the first CAES facility to be built in the United States since the Power South facility in McIntosh Alabama, which was built in 1991 and also contains Dresser-Rand turbo machinery. The Dresser-Rand related contract is valued at approximately $200 million.
According to Vincent R. Volpe Jr, President and CEO of Dresser-Rand, "This project award is of strategic as well as financial significance to our Company.
First, it validates the view that the value of large energy storage in the form of CAES is a viable economic investment. As explained over the past several years, we have been working with numerous clients to support their research of this bulk storage option. This order from Apex, affirms the value proposition of CAES.
Secondly, we are pleased that we have been chosen by Apex on this important project, which we believe will lead to further CAES projects in the coming years. We believe this order represents the first step in the development of a compelling market opportunity.
Dresser-Rand continues to expand outside of the Oil and Gas supply chain into the greater energy infrastructure market through participation and investment in the environmental solutions power space by supplying high speed rotating equipment and services solutions. We believe our evolution is an important differentiator from companies whose revenue streams depend principally on one or a few specific segments within energy infrastructure. Our participation in CAES further strengthens this approach, which is the result of a conscious strategic effort undertaken several years ago by the Company."
According to Jack Farley, President and CEO of Apex, "In our evaluation of potential suppliers, it became clear that Dresser-Rand was the supplier with the most proven technology and experience to meet our performance requirements and maximize our project returns. The flexibility of SMARTCAES™ technology makes Dresser-Rand a clear choice to provide the equipment and life cycle services. They have a unique cycle and equipment design that has proven itself over 22 years of successful CAES operations. The flexibility of this cycle provides industry-leading dispatch flexibility and low cost, in compliance with air emissions requirements over an expansive operating range. We believe this contract will be the start of a long-term, successful relationship with Dresser-Rand for this project and others to come, both in the US and elsewhere around the world."
"We are very pleased to introduce the SMARTCAES™ technology and to be working with Apex to bring this exciting technology to market," said Jim Heid, Dresser-Rand's Senior Vice President, CAES Development. "We believe we are on the cusp of the re-emergence of the use of this environmentally-friendly power generation technology. A CAES system provides two different services either sequentially or concurrently – high pressure air compression and electric power generation derived from expanding the compressed air. Industry sources estimate that there are more than 40 such projects being contemplated over the next 5 to 10 years. A number of these potential projects are linked to growth in renewable power generation sources such as wind and solar farms. "
Dresser-Rand will manufacture the compression and expansion trains for the Bethel Energy Center at its facilities in Olean and Wellsville, NY. The project scope also includes transportation of the equipment to the Texas site, testing, placement in operation, and training.
Dresser-Rand is among the largest suppliers of rotating equipment solutions to the worldwide oil, gas, petrochemical, and process industries. The Company operates manufacturing facilities in the United States, France, United Kingdom, Spain, Germany, Norway, and India, and maintains a network of 49 service and support centers (including 6 engineering and R&D centers) covering more than 150 countries.
Apex is a Houston, Texas based company created with a vision to develop, construct, own and operate CAES plants. CAES is a proven power storage and generation technology with unique capabilities to satisfy emerging grid and power market needs. The Apex management team possesses exceptionally deep power industry experience encompassing power project development, marketing, trading, power plant operations and finance. Its highly accomplished management team is supported by an investor with broad experience in energy storage, further enhancing Apex's ability to achieve its project development objectives. The company's principal investor, Haddington Ventures, has over 20 years of experience developing, constructing and operating underground natural gas storage projects.
This news release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, the Company's plans, objectives, goals, strategies, future events, future bookings, revenues, or performance, capital expenditures, financing needs, plans, or intentions relating to acquisitions, business trends, executive compensation, and other information that is not historical information, particularly the statements concerning the re-emergence of the use of CAES technology, the estimated number of CAES projects contemplated over the next 5 to 10 years and Dresser-Rand's estimated potential opportunity with respect to each CAES project. The words "anticipates", "believes", "expects", "intends", "appears", "outlook," and similar expressions identify such forward-looking statements. Although the Company believes that such statements are based on reasonable assumptions, these forward-looking statements are subject to numerous factors, risks, and uncertainties that could cause actual outcomes and results to be materially different from those projected. These factors, risks, and uncertainties include, among others, the following:the inability to obtain the requisite funding for the construction of the project; economic or industry downturns; the variability of bookings due to volatile market conditions, subjectivity clients exercise in placing orders, and timing of large orders; volatility and disruption of the credit markets; its inability to generate cash and access capital on reasonable terms and conditions; its inability to implement its business strategy to increase aftermarket parts and services revenue; its ability to comply with local content requirements; delivery delays by certain third party suppliers of large equipment; cost overruns and fixed-price contracts; its ability to implement potential tax strategies; competition in its markets; failure to complete or achieve the expected benefits from any future acquisitions; economic, political, currency and other risks associated with international sales and operations; fluctuations in currencies and volatility in exchange rates; loss of senior management; environmental compliance costs and liabilities; failure to maintain safety performance acceptable to its clients; failure to negotiate new collective bargaining agreements; a failure or breach of our information system security; unexpected product claims and regulations; infringement on its intellectual property or infringement on others' intellectual property; its pension expenses and funding requirements; difficulty in implementing an information management system; and the Company's brand name may be confused with others. These and other risks are discussed in detail in the Company's filings with the Securities and Exchange Commission at www.sec.gov. Actual results, performance, or achievements could differ materially from those expressed in, or implied by, the forward-looking statements. The Company can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them does, what impact they will have on results of operations and financial condition. The Company undertakes no obligation to update or revise forward-looking statements, which may be made to reflect events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, except as required by applicable law. For information about Dresser-Rand, go to its website at www.dresser-rand.com.
SOURCE Dresser-Rand Group Inc.