Pátria Investimentos, Shell and Mitsubishi Hitachi Power Systems announce partnership in thermal power plant


Joint venture will invest US$700 million in pioneering energy project

São Paulo, February 12, 2019 - Pátria Investimentos, the Shell Group and Mitsubishi Hitachi Power Systems (MHPS) have announced the construction and operation of the gas-based thermal power plant Marlim Azul in Macaé, Rio de Janeiro. The partnership envisages construction of the plant and the sale of energy generated by it in both the captive market, through the auction held by the Brazilian electricity regulatory agency ANEEL in December 2017, and in the free energy contracting environment (ACL), through Shell Energy Brasil S.A. Pátria Investimentos will have a 50.1% stake in the project, while the Shell Group will have 29.9% and MHPS 20%.

"This project is extremely important for the development of the energy industry and the Brazilian economy. We believe this initiative will meet the needs of this sector," said Otavio Castello Branco, partner at Pátria Investimentos.

The Marlim Azul (565 MW) plant was the first winning project at Brazil's pre-salt gas-based energy auctions, offering one of the most competitive unit variable costs (CVU) among gas-based plants. The plant will go operational in 2022, generating additional energy, which will be sold in the free market. The joint venture will invest US$700 million in the construction of the thermal power plant, which will receive gas supplied by Shell Brasil Petróleo Ltda.

"This is a key strategic step for Shell in Brazil towards diversifying its portfolio and in the energy transition of the country. We were looking for an efficient way to monetize natural gas, which will be produced in the pre-salt fields, where our presence has increased significantly. This project will enable synergies among our deep water, gas and electricity businesses and for this, we have found partners that are committed to and aligned with our goals," said the CEO of Shell Brasil Petróleo Ltda., André Araujo.

The first plant to use the MHPS gas turbine equipped with M501JAC technology in Brazil, Marlim Azul is expected to dispatch more than 80%, which will enable it to complement the intermittence of renewable generation by exploring the natural gas reserves in the pre-salt layer. At the peak of plant construction, up to 1,500 direct jobs may be created.

"MHPS is privileged to bring our world leading technology to Brazil as we help usher in a new era of using Brazilian pre-salt gas to provide flexible power that will compliment intermittent wind and solar power generation," said Paul Browning, CEO of MHPS Americas. Browning continued, "The opportunity for increased energy stability using pre-salt associated gas is an energy breakthrough for Brazil that we and our partners at Patria and Shell will make happen. Together, we will deliver a Change in Power."