BG Group has expanded its electricity generation business in the US with the $685m (£350m) acquisition of a power plant in Connecticut. The company announced yesterday that it had bought the Lake Road power plant, an 805MW gas and oil-fired station in Dayville. “The Lake Road plant supplies power into the ISO New England, a well established and liquid power market. It is a modern three-unit facility with the potential for further expansion,” a spokesman said. In October, BG acquired another plant in the New England region, the 170MW Dighton facility in Massachusetts. BG said the New England plant was attractive because of the newly implemented “Forward Capacity Market”, a policy that limits new plants, and the “rapidly tightening reserve margins in the region”. Martin Houston, managing director of BG North America, said: “The acquisition of Lake Road represents an important step in the implementation of our integrated US strategy. Lake Road and Dighton have the potential to offer BG attractive returns and will be readily integrated into our growing US gas business.”

In the US, BG is already a significant importer of liquefied natural gas (LNG) and it is also active in trade gas. Branching out into downstream business, such as power generation, is part of the “integrated” approach the company has taken in the US. BG owns all the capacity rights, through to 2028, at North America’s largest operating LNG importation terminal, Lake Charles in Louisiana. This facility has the capability to receive, store, vapourise and deliver an average daily send-out of 1.8 billion cubic feet (bcf/d). Additionally, the company holds supply and regasification rights of 446 million standard cubic feet per day (mmscf/d) for 22 years at the Elba Island LNG terminal near Savannah, Georgia. Expansion work is expected to increase its throughput capacity to 1.17 bcf/d from 2012. Although BG is mainly an exploration and production group, it does have electricity generation interests in several countries, including the UK. It has a total of 2.75 Gigawatts of power generation, including, in the UK, the Seabank 1130MW power joint venture, and it wholly owns the 600MW Premier Power plant. It also has interests in a 760MW plant in Malaysia, a 1,000MW power station in the Philippines and a 400MW facility in Italy.

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