A consortium led by ESB International is likely to build a £150 million sterling (€250 million) gas-fired power generation station at Coolkeeragh, Co Derry, after winning a competition run by Northern Ireland's energy regulator, Mr Douglas McIldoon.
The contract will be formally awarded by the Minister of Enterprise, Trade and Investment, Sir Reg Empey.
The ESB must apply directly to Sir Reg for the contract. Its joint venture partners are British Gas and a group of management and staff which bought an existing oil-fired generation plant at the site in 1992.
An ESB spokesman would say only that the State-owned company was the "majority" partner in the group.
The consortium faced opposition from two other groups: British energy company Powergen; and Northern Ireland firm Viridian in a joint venture with French energy group Elf.
These are still entitled to apply to Sir Reg, although Mr McIldoon said his "strong advice" will be grant the contract to the ESB group.
"I'm simply identifying the one which would protect the environment and hold down prices. Any power plant should add power to the system, reducing system losses," Mr McIldoon told The Irish Times.
"They offered the greatest competition benefits and were prepared to take a competitive risk."
The decision was based on an assessment by the Northern Ireland transmission system operator, which controls its power network, of written submissions from the competing groups.
British Gas also plans to construct a pipeline from Belfast to Derry to supply the proposed plant. It is thought that this element of the proposed plant will cost an additional £100 million sterling.
Mr McIldoon's spokesman said the construction of a gas-fired generation plant in the northwest of Northern Ireland was crucial to the prospects of expanding the region's gas network. "The pipeline was always dependent on there being a power station."
The Coolkeeragh plant is expected to be fully operational by 2004, when the contract for the existing plant expires.
In existing operations in Northern Ireland, the ESB controls about 7.5 per cent of the electricity supply market through use of the cross-Border interconnector. This represents 25 per cent of the "eligible" market of commercial users of power.
