The coming two months will see a couple of previously-planned multi-billion dollar investments on Jurong Island finally fall into place.
Jurong Aromatics Corporation (JAC) is set to start construction of its US$2.4 billion aromatics complex in March, sources said, once its US$1.56 billion financing package is signed by the middle of February.
And Sembcorp - which has been contracted by JAC to supply it with steam, water and wastewater treatment services - is also set to sign off on a $900 million EPC deal with Alstom to expand its cogeneration capacity by some 800-megawatts this quarter, BT understands. This will double its cogen capacity to 1,615 MW, giving it economies of scale to better compete.
A source said that JAC has scheduled a debt package signing after the coming Lunar New Year holidays with ‘some 11 banks, plus two Korean governmental groups’ - with the latter being the Export-Import Bank of Korea and Korea Trade Insurance Corp.
This follows a roadshow last November which saw the JAC financing deal, jointly led by ING Bank and Royal Bank of Scotland, being fully subscribed to by apparently mainly European banks.
‘Construction of the JAC complex will now start in March, with completion expected in 36 months,’ the source added.
This means that the world-scale project - which will produce 1.5 million tonnes per annum of aromatics and 2.5 million tpa of transport fuels - will now come on-stream in early-2014. This is some three years later than it had earlier planned, as the project ran smack into the global credit crunch in 2009.
Sembcorp - which earlier indicated it would not build new capacity pending securing customers - now has the justification, with the JAC project steaming ahead, and Germany’s Lanxess already building its synthetic rubber plant.
But as the genco’s utilities deals with JAC and Lanxess are mainly for steam and wastewater treatment, Sembcorp will approach its expansion judiciously, and carry it out in two phases. ‘The first 400 MW is expected to come on-stream end-2013, with the second coming later,’ a source said, explaining that ‘a 800MW expansion all at once will be too lumpy, especially given the many other power plants coming on at the same time’.
The 800MW cogen expansion is an addition to Sembcorp’s announcement last August to build an $800 million multi-utilities complex next to an earlier-planned $40 million wastewater treatment plant at the island’s Tembusu sector. The project, on a 5.3-hectare site, included initially a cogen plant producing 400MW of power and 200 tonnes per hour of steam.
The additional 400MW to be added will put Sembcorp on a stronger footing to compete with new power/utility plants coming up there.
China Huaneng-owned Tuas Power is currently building a $2 billion clean coal/biomass multi-utilities complex on Jurong Island to supply steam and cooling water to Lanxess, while on the mainland, it is also expanding its capacity to supply utilities to new investors like Renewable Energy Corporation and Neste Oil.
YTL-owned PowerSeraya has also entered the utilities game, having recently completed building 800 MW of new cogen capacity, while KepCorp is boosting its current 500MW of capacity in Tembusu to 1,300 MW. New player GMR is also building its new 800MW Island Power station there.
