Maxim Power Corp. has announced that it has entered into an Engineering, Procurement and Construction (“EPC”) contract for the completion of its 204 MW natural gas-fired power plant located near Grande Cache, Alberta (“M2“).
The EPC contract was entered into between Milner Power II Limited Partnership, a wholly owned subsidiary of MAXIM, and BPC Milner (the “Contractor”), a joint venture between affiliates of PCL Construction Group Inc. and Black & Veatch Corporation.
Through the EPC contract, the Contractor will complete and deliver M2, a 204 MW simple cycle natural gas-fired power plant, as a fixed price, turn-key project with a targeted substantial completion in April 2020. The EPC contract value is approximately $83 million and includes approximately $39 million of work already performed by members of the Contractor’s joint venture under various time-and-material agreements, which have been superseded by the EPC contract.
The EPC contract requires that MAXIM secure binding financing arrangements to provide sufficient funds for the construction of M2 within 60 days. MAXIM is currently completing arrangements with related parties, under the supervision of a committee of independent directors, to provide revolving credit facilities for the purpose of providing full funding for the project. There is no certainty that any such credit facilities will be entered into or, if entered into, the final terms thereof. MAXIM will make additional announcements with respect to any such agreements as required.
MAXIM believes strongly that M2 will be a top performing facility in its class in the Alberta power market. MAXIM anticipates that M2 will cost approximately $143 million, excluding financing costs. As of this date, MAXIM has spent approximately $77 million and estimates the remaining cost to complete the project is approximately $66 million. MAXIM retains the option in the future to increase the capacity of the M2 facility, in conjunction with increasing its efficiency, by expanding M2 to operate with combined cycle technology.
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