Net Power Inc. announced two agreements advancing its power-first strategy prioritizing speed, reliability and scale for large-load customers.
Equipment and cost-reimbursement deals advance Project Permian in Texas
Net Power has secured the rights to acquire 123 megawatts (MW) of new power generation equipment which, upon closing of the agreement, would bring Net Power’s total potential power generation capacity to nearly 200 MW for the first phase of Project Permian, its inaugural powered land project in Texas.
Separately, Net Power and a prospective end customer have entered into a cost reimbursement agreement that provides for, among other things, the reimbursement of certain costs incurred by Net Power in connection with the procurement of the 123 MW of new equipment.
“Entering into these agreements is a practical next step in our power-first strategy that we outlined in our second-quarter earnings call,” said Danny Rice, Chief Executive Officer of Net Power. “When taken together, these agreements provide us the opportunity to secure and deliver more power sooner with appropriate financial protections. This becomes a template we hope to replicate to secure additional generation capacity for early deployment at our first project.”
Transaction Highlights:
- Exclusive path to approximately 123 MW of additional capacity: The deposit and exclusivity agreement relates to a third party’s engineering, procurement and construction position and associated power generation equipment rights for an approximately 123 MW gas-fired power generation project. In connection with this agreement, Net Power has made a $20 million deposit, which will be credited at closing towards the total purchase price. The agreement remains subject to customary third-party consents, definitive documentation, and other closing conditions. Closing is expected to occur in the third quarter, at which point a portion of the total cost will be due and paid from cash on hand; the remainder will be due and paid in accordance with equipment manufacturing, delivery and installation milestones.
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- Cost-reimbursement framework with a prospective customer: Under the cost reimbursement agreement, the prospective customer may reimburse specified, approved, and documented third-party costs incurred in connection with the proposed acquisition and related project development, subject to the agreement’s terms, procedures, and aggregate cap. The framework does not obligate either party to enter into an energy services agreement and does not constitute a commitment by any party to purchase power. This cost reimbursement agreement may serve as collateral to support attractive equipment financing.
