Construction of clean coal/biomass plant on Jurong Island begins

China Huaneng plant to draw new petrochemical investors
EDB says some have reserved land at Tembusu, but not started on projects
Ronnie Lim Business Times 12 Nov 09;

CHINA Huaneng Group's latest $2 billion clean coal/biomass cogeneration investment on Jurong Island - which is expected to shave 10 per cent off customers' utilities bills - will be a catalyst in helping to draw new petrochemical investors at the greenfield Tembusu sector.

The project will contribute significantly to the petrochemical island's integration strategy, 'especially as competitive utilities options are particularly critical to the energy and chemical industry, which is a large consumer of steam and power', said Economic Development Board (EDB) chairman Leo Yip at its groundbreaking yesterday.

While he did not specifically say so, the project should encourage chemical companies, which Mr Yip said, 'despite adopting a cautious approach during the recession, are continuing their project studies on new investments, in readiness for the upturn'.

A number of petrochemical investors have already reserved land at Tembusu, but have not started building their projects yet, according to Julian Ho, who heads a multiple portfolio including chemicals at the EDB, but he declined to name them.

Germany's Lanxess is, for instance, expected to start building its 400 million euro (S$832 million) synthetic rubber plant at Tembusu around mid-2011. Others in the wings include the Jurong Aromatics Corporation US$2 billion project and possibly Mitsui Chemicals.

Despite still-shaky economies, Cao Peixi, China Huaneng president and chairman of Huaneng Power International - which bought Tuas Power for $4.2 billion - said that the group was confident enough about the Singapore market to give the go-ahead to its Tembusu Multi-Utilities Complex (TMUC).

'Investing in Singapore is an important part of Huaneng's global strategy,' he said.

'We will leverage on our expertise and resources to support Tuas Power's growth and maintain its competitive advantage in the Singapore energy market . . . at the same time, we also hope that we will be able to contribute to Singapore's energy diversity and security.'

The TMUC project - which will use low-sulphur coal (80 per cent of the fuel mix) and palm shell kernels and wood waste (20 per cent) - will provide 160MW of electricity and about 1,000 tonnes of steam per hour when completed. It will also provide chilled water and treat industrial waste.

Because of the use of biomass, the plant's advanced technology such as special circulating fluidised boilers, and careful handling of the coal and coal ash, TMUC's emission levels will even be lower than some oil-fired power plants.

Furthermore, as each unit of electricity is produced at a lower cost, it will translate to cost savings of about 10 per cent of a customer's utilities bill compared with energy generated by a gas-fired plant, the company said.

Lim Kong Puay, Tuas Power president and CEO, said that while the original plan was to build the entire project at one go, it will now do so in tandem with customer demand. This will see the project being done in two phases, with part of the clean coal/biomass cogeneration plant ready by 2012, and the rest by 2014.

Financing for the $2 billion project will come from equity from the parent company, as well as from bank financing.

While the 2,670MW Tuas Power currently has a 24-25 per cent share of Singapore's electricity market, Mr Lim declined to give a figure on what its targeted share of the utilities market on Jurong Island will be, come 2014. 'The Jurong Island market is big enough for a new player,' he would only say.

'We see the standalone TMUC project as a long-term investment commitment, and as is (with China Huaneng's go-ahead), we are already seeing renewed interest coming from potential customers there.'

Construction of S$2b multi-utilities plant begins on Jurong Island
Ryan Huang, Channel NewsAsia 11 Nov 09;

SINGAPORE: Construction works have begun on the Tembusu Multi-Utilities Complex - a S$2 billion facility on Jurong Island for generating steam, chilled water, electricity and treating industrial waste.

The multi-utilities plant is expected to help develop Singapore's petrochemical sector, as well as bolster the country's energy security.

"As a utilities provider, it is important to put in the necessary infrastructure in place, and this will provide the impetus for new investors to invest in Jurong Island," said Lim Kong Puay, president & CEO, Tuas Power.

The move is in line with the nation's plans to develop the Tembusu area of Jurong Island as a new petrochemical sector over the next five years.

The new plant is expected to be about 10 per cent more cost-efficient than conventional ones due to synergies from producing the various utilities. One example is the simultaneous production of steam and electricity.

The facility will be completed in two phases, and will be partially ready by 2012. The rest of the complex will be ready by 2014.

The facility will be run by Tuas Power, which is a member of China Huaneng Group. It represents one of the most significant Chinese investments in Singapore and is expected to further enhance the island's position as a platform for firms to go international.

Leo Yip, chairman, Singapore Economic Development Board, said: "We welcome the opening of Tuas Power's Tembusu Multi-Utilities Complex to enhance the range of third party utilities options as well as competitiveness on Jurong Island.

"With Asia becoming an increasingly important consumer of energy and chemical products, Singapore is well positioned to be a strategic base for Chinese energy and chemical companies seeking to internationalise and access new markets to drive business opportunities."

- CNA/sc

Cheaper power for petrochem firms
Jonathan Kwok, Straits Times 11 Nov 09;

PETROCHEMICAL companies looking to set up processing plants at the Tembusu area of Jurong island can look forward to around 10 per cent of savings on their utility bills, with the construction of Tuas Power's $2 billion multi-utilities plant there.

The plant, with an initial opening planned for 2012, will supply steam, chilled water and electricity, which when co-produced, will lead to higher efficiency.

These cost savings will be passed on to customers through more competitive rates, which will be around 10 per cent lower when compared to energy from gas-fired plants, said Mr Lim Kong Puay, president and chief executive of Tuas Power, at the plant's official ground-breaking ceremony on Wednesday.

Tembusu is an as-yet-undeveloped area in the northwest of Jurong island that the Economic Development Board has earmarked for growing the petrolchemicals industry.

With a US$3 billion (S$4.17 billion) petrochemical cracker complex by Shell to be completed on Pulau Bukom by the first quarter of next year, Mr Julian Ho, executive director of energy, chemicals and engineering services at EDB, expects interest from downstream companies to set up processing facilities at Tembusu.