Alter NRG Corp. announces the finalization of the plant siting for the first Integrated Gasification Combined Cycle (IGCC) power facility in Canada

CALGARY, Sep. 15, 2008 (Canada NewsWire via COMTEX) -- NRG | Quote | Chart | News | PowerRating -- TSXV - NRG

Alter NRG Corp. ("Alter NRG" or the "Company") is pleased to announce that it has closed the previously announced acquisition of a project site in Bruderheim, Alberta (approximately 60 kilometers northeast of Edmonton) for $3.1 million, including $0.6 million in costs related to settlement of existing transmission commitments. The Company plans to use the site to develop Canada's first IGCC facility with the first phase to be operational as early as 2010. On commencement of operations, the facility is expected to be capable of producing approximately 120 megawatts (MW) of electric power using a blend of natural gas as well as synthesis gas (syngas) produced using Alter NRG's proprietary plasma gasification technology. The facility will be designed for carbon capture and storage (CCS) with approximately 600,000 tonnes per year of captured CO2 to be injected into nearby geological formations or used at nearby oilfields in enhanced oil recovery (EOR) projects.

"We are excited to advance a project that will help to redefine emissions from fossil fuel power generation while retaining a low cost structure." said Mark Montemurro, Alter NRG President and Chief Executive Officer. "For our shareholders, this represents a project that utilizes our proprietary plasma gasification technology, which has the potential for strong returns and will be operated by Alter NRG in our home market."

The project is expected to be completed in two phases in order to take advantage of near-term capacity needs in the Alberta power market. The first phase of the project will use natural gas as a feedstock while the second phase of the project will replace the majority of the natural gas with syngas that can be produced for less than $3.00 per Gigajoule (GJ).

Development of the first phase of the project has already commenced with the intention of having the 120 MW natural gas combined cycle (NGCC) facility operational by early 2010. NGCC facilities are the cleanest fossil fuel power generation technology available today.

The capital cost for phase one is approximately $130 million and the Company has already purchased a steam turbine and identified gas turbine equipment to purchase. The regulatory process is underway, as regulatory permitting is critical for early implementation of the first phase. The Company expects timely issuance of the required permits.

The second phase of the project will use petroleum coke and oilfield waste, which are both available in the nearby area, to create syngas using the Alter NRG proprietary gasification system. The syngas will replace the majority of the natural gas as a fuel for the generation of electricity. Phase two will reduce the input costs of the natural gas in addition to creating additional revenue streams through oilfield waste tipping fees and the sale of CO2. The project is expected to have total operating costs, net of the by-product revenues, of approximately $30 per Megawatt hour (MWh).

The capital cost for the second phase of the facility is expected to be approximately $350 to $400 million, which represents a total project capital cost of less than $20 per MWh over the facility's 30-year expected life. With an overall cost structure of less than $50 per MWh, this IGCC project represents a solid investment in an Alberta power market where average prices to date in 2008 have been $88.75 per MWh. As well, independent forecasts indicate prices in excess of $95 per MWh from 2010 onwards when the facility is expected to be operational.

The Bruderheim facility will capture up to 90% of the CO(2) produced by the plasma gasifier (up to 1,700 tonnes per day) which is expected to be sold to oilfield producers in the nearby area for EOR. The project's carbon emissions profile will be similar to that of a NGCC facility, representing the best available emissions level from fossil fuel power generation. The Alberta government recently established a $2 billion fund for CCS and EOR projects which is indicative of the government support for climate change initiatives to significantly reduce greenhouse gas emissions, for which Alter NRG has submitted a funding proposal.

The Company is anticipating preliminary project returns of approximately 15% or greater based on current independent market price forecasts and independent capital cost estimates. The Company will be advancing a partner selection process over the coming months. Alter NRG intends to finance its working interest in the first phase of project through a structured debt facility and the Company's existing cash reserves.

ABOUT ALTER NRG

Alter NRG is pursuing alternative energy solutions to meet the growing demand for environmentally responsible energy in world markets. The Company's vision is to become a leader in the development of innovative gasification projects for the commercial production of energy. The Company's objective for the next decade is to utilize our commercially proven plasma gasification technology to become a senior energy producer of hydrogen, syngas, and transportation fuels (diesel, naphtha, ethanol, etc.), steam and electricity, all of which are fundamental products for the world's growing energy needs.

<< The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. >>

Advisory Respecting Forward-Looking Statements:

This news release contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "confident", "might" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this news release contains forward-looking information and statements pertaining to the following: currency exchange rate fluctuations; environmental risks; unanticipated reclamation expenses; ability to finance; risk of obtaining regulatory approvals; ability to find joint venture partners; engineering and design risk; fluctuation in commodity prices and other expectations, beliefs, plans, goals, objectives, assumptions, information and statements about possible future events, conditions, results of operations or performance. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release.

The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties including but not limited to:, unexpected events during construction, and start-up; variations in feedstock grade,; delay or failure to receive board or government approvals; timing and availability of external financing on acceptable terms; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of commodities; failure of plant, equipment or processes to operate as anticipated; delays in the completion of development or construction activities, as well as those factors discussed in or referred to under the heading "Risk Factors" in the Company's Prospectus dated April 10, 2007 available at www.sedar.com which could cause actual results to differ materially from those anticipated and described in the forward-looking statements. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements.

The Company cautions that the foregoing list of assumptions, risks and uncertainties is not exhaustive. The forward-looking information and statements contained in this news release speak only as of the date of this news release, and the Company assumes no obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable securities laws.

SOURCE: Alter Nrg

Mark Montemurro, President and Chief Executive Officer, (403) 806-3877, Mmontemurro@alternrg.ca; Daniel Hay, Chief Financial Officer, (403) 806-3881, Dhay@alternrg.ca; Media Relations, Shauna MacDonald, (403) 538-5645, smacdonald@brooklinepr.com

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