BP is negotiating with Entergy, a US company, to build and operate the power station at the oil giant's 370 acre Saltend chemicals complex. The new plant would replace a smaller existing power generating facility at the site and lessen the oil giant's dependence on variable prices in the wholesale electricity market.
Six hundred jobs could be created during the construction phase, though in a graphic illustration of the economies of modern gas generation, BP said that only 35 staff would be needed to operate the plant after it is completed.
The manager of the Hull works, Alan Boden, said: "The future of this site and its 1,300 employees depends on our ability to attract and support good investments which bring benefits to both BP and the local community."
BP said that the new power station would be solely supplied by the firm's recently launched gas supply business, BP Gas. The new venture has already signed contracts to supply ICI with gas for the power station which is being built to supply the latter's chemicals plant at Runcorn in Cheshire.
The Runcorn operations are energy-intensive, and ICI resolved to build its own power station at the site after complaining for several years at the high level of electricity prices which it was being forced to pay.
Shares in BP closed at an all-time high yesterday, rising 2.5p to 618p.
Last week BP announced that it would increase its quarterly dividend by 18 per cent following a record half year in which profits rose by 23 per cent to pounds 1.28bn. It was the fifth increase in the payout in two years.
Investors have also seized on evidence that BP is coping with the squeeze on chemical operations much better than its rival Royal Dutch/ShellReuse content