SAINT JOHN, New Brunswick – NB Power and two private companies are negotiating with the province to build an 800-megawatt natural gas-fired generator that would sell most of its output to New England.

The development follows the collapse of a similar deal between the provincial government and Tractebel Energy Marketing Inc.

“It would be bigger than Point Lepreau,” Natural Resources Minister Jeannot Volpe said Monday, referring to the nuclear power plant about 25 miles from the Maine border.

There are two proposals on the table. One is a partnership between NB Power and a private company, while the second is a bid from a rival private corporation. Volpe declined to name the companies involved.

“They are two big players that are looking at this and they are considering a major capital project,” he said.

If successful, the 800-megawatt plant would far outstrip the original deal negotiated in 1998 between the former Liberal government and Tractebel.

That plan called for a 350-megawatt plant to be built adjacent to the existing Belledune generating station. It would have cost $300 million to build, employed 250 construction workers and kick-started the region’s natural gas dreams.

Tractebel’s project would have provided the anchor needed for Maritimes and Northeast Pipeline to build a lateral north from Moncton to Bathurst – a project that would have brought natural gas to the province’s northeast.

The deal began to sour in the summer of 1999 after Tractebel couldn’t secure a guaranteed supply of natural gas.

Volpe’s new plan would use the same Belledune site, but the proposed plant would be far larger. That’s a necessity, he said, because the estimated cost of a northeast lateral has risen following the completion of the Saint John and Halifax laterals, both of which had cost overruns.

“It will now cost about $200 million to build a lateral” to the northeast, Volpe said.

If successful, the new plant would be the second largest in the province, behind the Coleson Cove station in Saint John, which has a 1,006-megawatt capacity.