Desalination group Hyflux is set to make its foray into power generation when it starts building this quarter a 411-megawatt combined cycle gas turbine (CCGT) plant which is integral to its S$890 million second desalination plant project here at Tuas.
Hyflux has secured gas feedstock for the power plant, having recently signed a gas sales agreement for liquefied natural gas with Singapore’s LNG aggregator, or buyer, BG Group, sources tell BT.
No details of the LNG volume are available, although other industry sources say that the Hyflux deal will probably have close to soaked up whatever remainder LNG volumes BG Group had to offer under the latter’s exclusive licence to sell a total three million tonnes per annum or until 2023, whichever comes earlier.
Up until August, BG had sold 2.3 million tpa, or almost 77 per cent of its franchised volume, with the British group currently in the midst of carrying out its second two-month open season – which closes at end-October – for buyers for its remainder gas. Meanwhile Hyflux, with gas in hand, is now tieing up the engineering, procurement and construction deal for the power plant, which it expects to close very soon, the sources said.
‘Construction will start this year, with the project expected to be completed before 2014,’ a source said. This ties in with the LNG supplies to Singapore, with first deliveries by BG Group at the LNG terminal on Jurong Island expected in early-2013.
With its foray into power, Hyflux, which has been mainly involved in water desalination and treatment, has built up a core team to handle its oil and gas and power operations, and plans to beef this up, a source said.
In May, for example, Hyflux advertised for a power project manager/director to oversee the execution of the CCGT plant, and other oil and gas experts are also said to be in place.
The power plant is part of Hyflux’s second and larger desalination plant to be built in Singapore. It will add as much as 318,500 cubic metres of desalinated water per day to Singapore’s supply – dwarfing its earlier desalination plant here which has a capacity of 136,000 cu m daily.
There is industry speculation over whether Hyflux – which has desalination plants also in Algeria and China – will go it alone to operate its own power plant here or tie up with an experienced generation company. Hyflux is understood to be open to either option.
In Salalah, Oman, Hyflux for instance is a sub-contractor helping to build the desalination plant portion of a US$1 billion independent water and power project (IWPP) there secured by Sembcorp.
It is Sembcorp’s second big project there following its US$1.7 billion Fujairah IWPP in Abu Dhabi.
