TransAlta,AGL Propose New Cogeneration Plant Down Under

Business Wire, Sept 3, 1998

CALGARY, ALBERTA--(BUSINESS WIRE)--Sept. 3, 1998-- TransAlta(TSE:TA.) (ME:TA.) (Alberta Stock Exchange:TA.) Partners TransAlta and AGL Power Generation announced plans to pursue a $100 million, 150-megawatt cogeneration facility near Townsville in Queensland, Australia.

The partners signed an exclusive development agreement with QNI Resources Pty Ltd to locate the cogeneration plant onsite at its Yabulu nickel and cobalt refinery.

The proposed facility will provide electricity and steam for QNI's refinery and sell surplus electricity into the Queensland market. The facility will use natural gas from the proposed Papua New Guinea - Queensland gas pipeline. The plant will replace the coal-fired power station currently producing steam and electricity at QNI's refinery. The developers believe this project has significant commercial and environmental benefits over other power projects recently announced in Queensland.

"This project is another step toward achieving our strategy to double the megawatts of independent power projects we operate by 2001," said Dawn Farrell, TransAlta's executive vice-president, Independent Power Projects. "The key to this project is speedy action to bring natural gas to Queensland through the proposed pipeline."

The North Queensland Conservation Council (NQCC) applauded the initiative. "The replacement of the coal-fired power station with the introduction of a cogeneration plant is a major environmental step forward for QNI," said Jeremy Tager, co-ordinator of the NQCC. "Whilst there is still a need for significant environmental improvement on the site, NQCC hopes this represents the beginning of a new dialogue between industry and conservation in Townsville."

The project, which will be fully developed, operated and owned by TransAlta and AGL, combines TransAlta's expertise in building and operating cogeneration facilities in a number of countries with AGL's expertise in power generation, natural gas and electricity systems.

Cogeneration is the process where both electricity and useful steam are produced from a single fuel source. Natural gas is used to fuel a gas turbine to generate electricity. As the generator runs, it also produces heat. This heat is captured and used to produce steam, which QNI uses to operate its refinery. Cogeneration efficiencies are typically up to 80 per cent compared with 36 per cent from a coal-fired power station or 55 per cent from a combined cycle gas plant.

Power generated at this site will produce 500,000 tonnes less CO2 than if the power had been produced in a coal-fired power station. The facility would eliminate the need to transport 190,000 tonnes of coal per year by rail through Townsville to the refinery. The refinery will use any wastewater produced by the cogeneration facility.

Mr. Len Bleasel, managing director of AGL said, "This project is consistent with AGL's strategy of providing a range of energy services required for our customers to run their businesses."

TransAlta is an energy company with $5 billion in assets and is the leading producer of independent power in Canada. TransAlta is the major supplier of electricity within Alberta and operates in Ontario, New Zealand, Australia, Argentina and the United States. The company has interests in electricity generation, gas and electricity distribution, energy services and energy marketing. TransAlta is focused on providing its customers with innovative energy solutions in an increasingly competitive market.

AGL is a publicly listed Australian energy company valued at approximately A$3.5 billion. Wholly owned AGL companies sell and deliver energy to over one million gas and electricity customers in most Australian States and Territories. AGL owns, partly owns and/or operates over 43,000 kilometres of gas transmission pipelines, reticulation mains and electricity distribution systems as well as power plants in Australia and New Zealand.

QNI Limited is a publicly listed Australian company, which produces nickel and cobalt products for export to world markets. Ranked in the world's top five nickel producers, QNI operates the Yabulu nickel and cobalt refinery and the Cerro Matoso nickel mine and smelter in Colombia. QNI is one of the largest employers in North Queensland.

        CONTACT: TransAlta Corporation
                  Claudio Perrella, 403/ 267-7629
                  http://www.transalta.com