Tuas Power secures coal supplies

It has started to tie up deals with Indonesia producers
Ronnie Lim Business Times 16 Feb 11;

(SINGAPORE) China Huaneng-owned Tuas Power (TP) - which is building Singapore's first clean coal/ biomass-firing multi-utilities plant - has started to tie up long-term coal supply deals with producers in Indonesia.

TP's president and CEO Lim Kong Puay told BT: 'We are getting our coal from several coal producers there to ensure security of supplies.'

One is Jakarta-listed PT Bayan Resources which has just signed an agreement with TP's $2 billion Tembusu Multi-Utilities Complex (TMUC) to supply it with 13.36 million tonnes of environment-friendly coal for 15 years, starting in 2012.

The low-sulphur, low- ash sub-bituminous coal will be transported via covered, self-propelled barges from Bayan's Kalimantan coal mine to Jurong Island, Mr Lim said. TP expects to seal a deal with a barge operator for this shortly, he added.

And just like the operations at Huaneng's clean coal-firing power plants in China, the Indonesian barges will unload the coal at TMUC's Tembusu jetty, from where it will be transported via a covered conveyor system to covered storage silos before use by the Tembusu plant.

Mr Lim said that apart from its contract with PT Bayan Resources, TP has also sealed a second long- term supply deal with South Korea's Samtan Co Ltd, which operates a coal mine in East Kalimantan, but he declined to provide more details.

The Indonesian coal supplies will arrive in time for the TMUC facility 'whose first phase construction is on schedule, with the first steam unit there starting up in mid-2012', he said.

TP first broke ground for TMUC in November 2009 and started construction proper early last year.

When fully operational, the TMUC plant - whose fuel mix comprises 80 per cent clean coal and 20 per cent tropical biomass, mainly palm kernel - will produce about 1,000 tonnes of steam per hour and 160 megawatts (MW) of electricity.

It will also provide chilled water and treat industrial waste for petrochemical customers there.

TP is currently also negotiating with an unnamed party for the palm kernel, Mr Lim said.

Apart from the TMUC facility, China Huaneng - which has already invested $6 billion on TP - is spending a further $470 million to 'repower' the first of two older oil-fired steam plants at its 2,670MW Tuas power station into more efficient gas-firing combined cycle plants (CCPs).

This will make it TP's fifth CCP when the repowering is completed in 2014, dovetailing with coming liquified natural gas (LNG) supplies here.

PT Bayan Resources is engaged mainly in open cut mining for coal of various grades from mines located primarily in East and South Kalimantan.

The integrated producer produces coal ranging from semi-soft coking coal (used to make steel) to the environment-friendly, low-sulphur sub-bituminous coal (used by power plants).

Samtan is a leading South Korean energy company with primary interests in coal mining, production, and supply.

Samtan currently operates a coal mine in East Kalimantan through its 49 per cent owned subsidiary Kideco, the third-largest coal mining company in Indonesia.