China oil and energy giants plan Singapore tie-ups
Ronnie Lim, Business Times 9 Sep 09;
(SINGAPORE) One has bought over Singapore Petroleum Company and the other, Tuas Power. China's biggest oil and power generation companies, PetroChina and China Huaneng, now plan to work together to boost their operations, including those in Singapore.
'Huaneng has asked Tuas Power to start some discussions with PetroChina Singapore on possible areas of collaboration,' confirmed a source yesterday.
It could for instance, potentially lead to PetroChina supplying coal for Tuas Power's planned US$2 billion clean coal/biomass steam cogeneration plant here.
This follows the signing of a strategic cooperation framework agreement last week by the two Chinese conglomerates to jointly develop areas including natural gas-based power generation back home as well as abroad.
The two 'will join hands in gas generation projects, long-term client development, natural gas peak shaving and growth of clean energy generating capacity', PetroChina's parent, China National Petroleum Corp (CNPC) said on its website.
'PetroChina and Huaneng Power International will also proactively work together overseas, including in Singapore,' CNPC said, adding that the two will 'negotiate and coordinate on a regular basis'.
PetroChina is China's biggest listed oil firm, while Huaneng Power is the country's biggest listed power producer.
In Singapore, PetroChina - which started with an oil trading presence here - made its first big investment here in 2006 when it bought a 35 per cent stake in the 2.28 million cubic metre Universal Terminal on Jurong Island for US$160 million.
Following that, there was talk that the Chinese oil giant was keen on a Singapore refining presence and would even build its own refinery here - something which has now materialised in its latest $3.2 billion buy-over of SPC, which was completed just last Friday.
This gives PetroChina a half stake in the 295,000 barrels per day Singapore Refining Company - a joint venture with Chevron - as well as SPC's producing oil/gas fields in China and Indonesia, and a retail/marketing network including 38 petrol stations here.
Sources said that one possible area of cooperation here by the two Chinese giants could be in fuel supplies for the Singapore genco.
The 2,670 megawatts Tuas Power - Singapore's third largest generating company - currently uses piped Indonesian natural gas from both Sumatra and Natunas, and also plans to build a $2 billion clean coal/biomass plant on Jurong Island.
PetroChina could potentially supply the coal for the clean coal project, and in future, also provide liquefied natural gas to the Singapore genco, once Singapore's LNG contract with the sole appointed buyer BG Group expires.
Another possibility is for Tuas Power - which China Huaneng bought from Temasek Holdings for $4.2 billion in March last year - to supply utilities such as steam and electricity to SPC's refinery.
