The company said that the transaction values the power plant at about $1,400 per kilowatt of generating capacity.
Built in 2012 in Bayonne, the Bayonne Energy Center was expanded in 2018.
The power plant distributes electricity into New York City through an ABB-developed a 345kV AC submarine cable system laid from Bayonne beneath New York Harbor to a substation in Brooklyn, New York.
It meets the power consumption needs of more than 500,000 New York City homes and businesses.
MIC acquired Bayonne Energy Center in 2015 from an affiliate of ArcLight Capital Partners for about $720m. Since its acquisition, MIC has been operating the power plant, which is located on the land owned by its International-Matex Tank Terminals (IMTT) unit.
Originally, the capacity of the power plant was 512MW, generated by eight Rolls Royce natural gas-fueled turbines, each having a capacity of 64MW.
In late 2016, MIC gave a contract to Siemens for installing additional advanced aero-derivative gas turbines to the Bayonne Energy Center to increase its capacity to 644MW. Under the contract, Siemens delivered two Industrial Trent 60 Wet Low Emission (WLE) gas turbines and two generators.
MIC CEO Christopher Frost said: “Having completed various capacity and capability expansion projects at BEC, we concluded that this was an appropriate time to sell the facility and redeploy the proceeds to address strategic priorities including strengthening our balance sheet.”
MIC plans to use a part of the net proceeds of about $650m, after transaction fees and expenses, to cut down on its debt, which includes $150m outstanding on the revolving credit facility at its IMTT business.
The company said that proceeds not used for debt reduction purpose will be diverted to fund a part of its planned growth capital deployments.
MIC expects to close the sale of Bayonne Energy Center in the fourth quarter of 2018, based on receipt of customary regulatory and other approvals.
