LIMESTONE (AP) – Construction of a 55-megawatt electric generating plant that can cogenerate steam for industrial processes is expected to begin early next year at the former Loring Air Force Base.

The $60 million project, which began four years ago, has secured needed permits and moved a step closer to reality this week when Loring BioEnergy LLC exercised its option with the Loring Development Authority for property and a 200-mile pipeline from Searsport to Limestone.

The plant, which is targeted to go on line by early 2007, would burn natural gas and diesel fuel. The project is seen as bringing up to 700 construction jobs to the area and as many as 80 full-time jobs to Aroostook County.

“This cogeneration plant, a wholesale plant, will bring base load power to the northern Maine power grid and will be a component of the electrical grid in neighboring New Brunswick,” said Hayes Gahagan, project manager for Loring BioEnergy.

Financing for the project comes from a $60 million bond package being lined up through the federal Empowerment Zone. The contract to build the plant went to SW&B Construction Corp. of Auburn, Gahagan said.

The plant will have a capacity of 250,000 pounds of steam an hour, which can be used to heat existing facilities at the Loring Commerce Centre and provide steam energy for an industrial park that could be developed at the former bomber base, Gahagan said.

“We will have enough steam to furnish any large industry that wants to come to Loring,” he said. “It could be either a food- or wood-processing plant.

A second Searsport-to-Loring pipeline could be built to support the project, and the LDA will have the right to install a third pipeline along the 50-foot-wide right of way for another industrial use at Loring in the future.