Senoko goes green with $750m gas plant deal

Robin Chan, Straits Times 1 Oct 08;

SENOKO Power's electricity generation plants at Sembawang will soon be cleaner, greener and more efficient.

The company, recently acquired by a Japanese-French consortium, announced yesterday it has awarded a $750 million contract to convert three plants so they will be fired by natural gas rather than oil.

Senoko is one of the three largest power generators in Singapore, contributing about 3,300MW of electricity, or 30 per cent, of power here.

The plants, expected to be operational by the end of 2011, will run partly on liquefied natural gas (LNG), in addition to the piped gas from its two suppliers in Indonesia and Malaysia, said Mr Roy Adair, Senoko's president and chief executive.

This will help provide critical mass for Singapore's $1 billion LNG terminal, to be completed by April 2012, he added.

The converted plants will also be able to produce more electricity while at the same time cut carbon emissions.

The project will see Senoko's three 30-year-old plants of 250MW each converted to two 430MW gas-fired plants.

To power the plants, an additional 1.7 million cubic metres of gas a day will be needed in excess of its current 6.5 million cubic metres of gas a day requirement.

These new plants will also emit 40 per cent less carbon than oil-fired plants and 60 per cent less than coal-fired plants on a unit basis, Mr Adair said.

Senoko is therefore seeking to secure carbon credits from Singapore's National Environment Agency and the United Nations, which are critical to the overall viability of the project, he added.

Citing a report on global carbon emissions, he said that Singapore's carbon emission intensity had been reduced by 30 per cent between 2000 and last year.

Singapore's power generation has also become greener and more efficient from being 60 per cent oil-fired five to six years ago to 80 per cent gas-fired now, he added.

Through the conversion project, Senoko will save 40 per cent in costs compared to building a new plant from scratch. This will ultimately benefit the customers, Mr Adair said.

Bidding for the project began in May 2006, and was awarded to a consortium consisting of Mitsubishi Corp, Mitsubishi Heavy Industries and Hitachi Asia. Construction of the plants will commence next year, Mr Adair said.

The project is also the first for Senoko since it was acquired by the Japanese-French group Lion Power from Temasek Holdings last month in a $4 billion deal. It follows on the heels of Tuas Power's announcement on Thursday that it was building Singapore's first clean coal and biomass cogeneration plant on Jurong Island for $2 billion.

Lion Power announces $750m 'repowering'
Ronnie Lim, Business Times 1 Oct 08;

JAPANESE-FRENCH consortium Lion Power, Senoko Power's new owner, intends to make Singapore's largest generating company (genco) a fully integrated energy outfit, with strategic plans to go into LNG trading longer term, on top of trading of just electricity and carbon credits.

It announced yesterday a $750 million 'repowering' or redevelopment of three 30-year-old oil-fired plants into two 'greener' and more efficient gas-firing units which, when operational at end-2011, will buy gas from the $1 billion liquefied natural gas (LNG) terminal to be built on Jurong Island.

Senoko, near the Causeway, currently buys about 230 million standard cubic feet per day (mscfd) of piped gas from Malaysia and Indonesia, and will need another 60 mscfd, including for its new combined cycle gas turbines (CCGT), Roy Adair, Senoko's president and CEO told media. The company believes in energy security, and the project 'provides critical mass' for the vital Singapore initiative to build the LNG terminal, he said.

Brendan Wauters, executive vice-president of Suez Energy Middle East-Asia, and representing GDF-Suez - which has a 30 per cent stake in both Lion Power as well as the Singapore LNG terminal - confirmed that Senoko will go into LNG trading here once a Singapore moratorium given to the sole LNG aggregator, the UK's BG Group, expires.

BG has the monopoly to buy LNG starting second quarter 2012 when the LNG terminal starts up, until LNG imports here build up to three million tonnes per annum or 2018, whichever comes earlier.

LNG trading by Lion is a strategic fit given that consortium leader Marubeni Corp and GDF-Suez are both big LNG buyers and traders, while its other members like Kansai Electric and Kyushu Electric are also LNG consumers. With access to piped Malaysian and Indonesian gas - and later, its own LNG, which can be sourced globally, Senoko can easily arbitrage LNG, Mr Adair said.

With the two new CCGTs, Senoko will have seven such environment- friendly and efficient units with total generating capacity of 2,805MW. Five of these will be the most efficient such units in Singapore.

Senoko had considered using coal, which is a cheaper fuel, Mr Adair said, but was very conscious of its carbon footprint which is two-and-a-half times that of natural gas. On the other hand, the carbon footprint of gas is also only 60 per cent that of oil. The genco will be seeking carbon credits for the project, he added.

Lion officials said they had no problems securing debt and equity to close its $4 billion purchase of Senoko from Temasek Holdings last month, and it has secured bank financing for its latest $750 million repowering project.

Singapore's electricity demand is growing at 4 per cent annually, or about 200MW of generating capacity per annum, Mr Adair said. This means that its conversion of the three 250MW oil-fired plants into two new 430MW CCGT 'will take four years to be consumed'.

His projection is that, come 2011, when Senoko's two new plants start up, 'there will be more than sufficient commercial (that is, economically viable) plants here to meet Singapore electricity demand, although there will be overcapacity in total supply, counting the less commercial plants'.

Senoko steps on the gas to convert its old plants
Today Online 1 Oct 08;

SENOKO Power, which was sold to a Japanese-led consortium last month, will invest $750 million to convert three of its old oil-fired power plants into two that burn natural gas.

The power generation company yesterday said it had awarded the contract to a consortium comprising Mitsubishi Corp, Mitsubishi Heavy Industries and Hitachi Asia.

The Stage 2 repowering project comes four years after Senoko Power, Singapore’s largest power generator, completed its Stage 1 programme where it invested$600 million to convert three oil-fired units into gas generators.

The Stage 1 conversion helped the company boost generation efficiency to more than 40 per cent from 36 per cent previously, and to reduce carbon dioxide emissions by about 2.5 million tons a year.

Senoko’s president and chief executive, Mr Roy Adair, said the new project will refresh three of its 30-year-old oil-fired power plants. “Oil-fired generation is far more carbon-intensive and also more expensive than gas-fired generation.”

The new plants will emit40 per cent less emissions than oil-fired plants and 60 per cent less than coal fired plants.

The plants are scheduled to be in full commercial operation by the end of 2011. They will use natural gas from existing gas-supply agreements and the country’s future Liquefied Natural Gas terminal. 938 LIVE