To take advantage of coming LNG supplies in early- 2013, China Huaneng Group will be spending an additional, estimated $800 million to ‘repower’ Tuas Power’s two older oil-fired steam plants into more-efficient, gas-firing ones.
The company, which has already invested over $6 billion in Singapore, is set to award the first of the repowering EPC deals this month, BT has learnt.
The move comes as the generating companies (gencos) here are scheduled to sign letters of credit mid-month, confirming their earlier purchase agreements for an initial 1.5 million tonnes per annum of liquefied natural gas, with UK’s BG Group, Singapore’s appointed LNG aggregator.
PowerSeraya, for instance, is later this month inaugurating its $800 million repowering project - covering conversion of two earlier units into 800-megawatts of cogeneration combined cycle plant which is also aimed at using LNG.
Tuas Power (TP) president and CEO, Lim Kong Puay, told BT yesterday: ‘We expect to award the engineering, procurement and construction (EPC) deal for repowering of the first of the 600 MW steam plants in a couple of weeks time.’ The 10-year old plant will be replaced by a 400-MW combined cycle gas turbine (CCGT) expected to cost about $400 million.
‘We’ve also started planning the repowering of our remaining, second steam plant,’ he said, adding that while a decision on this will depend on market growth, this is likely to be taken by the middle of next year.
Construction of the first CCGT is expected to start this year-end, and will take about two and a half years to complete, said Mr Lim - tieing in with the scheduled first LNG supplies in 2013.
The repowering will help TP cater to growing demand, like its $1 billion- plus deal to supply utilities to Neste Oil’s $1.2 billion biodiesel facility which is starting up shortly.
The latest $800 million repowering investment by China Huaneng - which bought the 2,670 MW TP, the third largest genco here, for $4.2 billion in 2008 - follows its $2 billion investment at end-2009 in the coal/biomass-firing Tuas Multi-Utilities Complex (TMUC) it is currently building on Jurong Island.
TMUC, coming on- stream in 2012, will supply utilities like steam and water, apart from power, to petrochemical companies there, like Germany’s Lanxess with which it clinched a deal recently.
Meanwhile, the other gencos here are also in the midst of repowering or building new plants to make use of the LNG.
Senoko Energy is currently carrying out a $750 million repowering of three steam units into two 430-MW CCGTs, while newcomer Island Power will start building its $1.2 billion, 800-MW station in Q1 next year.
Sembcorp in August announced it was building a new $800 million multi-utilities facility, including a 400-MW plant, on Jurong Island, after clinching a supply deal with Jurong Aromatics Corporation; while the 500-MW Keppel Merlimau Cogen is planning a 900-MW expansion.
A KepCorp spokesman told BT last month: ‘We are currently working on the tender and will be awarding it soon. Our plan is to commence construction thereafter. The Energy Market Authority is aware of our plans.’
