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Oil report

Senoko spends S$750mln to convert to gas-fired power

SINGAPORE, Sept 30 (Reuters) - Singapore’s Senoko Power has awarded a S$750 million ($523.4 million) contract to convert oil-fired power plants into gas-fired stations, the city-state’s biggest utility said on Tuesday.

It gave the engineering, procurement and construction deal to Japan's Mitsubishi Corp 8058.T, Mitsubishi Heavy Industries 7011.T and Hitachi Asia, converting three 250 megawatt oil-fired plants into two 430 megawatt gas-fired ones.

The new plants are due onstream by late 2011.

Senoko will use both pipeline gas as well as liquefied natural gas (LNG) from Singapore’s 3 million tonnes per year LNG terminal when it comes on stream by April 2012, Senoko’s chief executive, Roy Adair, told journalists.

But Adair declined to say how much of the additional 60 million cubic feet a day of gas would be LNG. Senoko now has contracts for roughly 230 million cubic feet a day of pipeline gas from Malaysia and Indonesia.

“That will help provide critical mass to the LNG terminal project,” Adair said during a news conference.

Resource-poor Singapore decided two years ago to go ahead with LNG imports to meet future energy demand and ease its dependence on piped gas from Indonesia and Malaysia. Senoko was the first Singaporean utility so far to say it would use the LNG.

Senoko will also seek emissions reduction credits from the United Nations for its move from oil to gas.

The deal is part two of Senoko’s “repowering” scheme. During stage one from 2000 to 2004, Senoko had already converted three oil-fired plants to burn gas.

The company now has capacity of 3,300 megawatts.

Demand growth for Singapore’s power was four percent per year, or 200 megawatts, Adair told reporters.

The news comes just weeks after Singapore's Temasek Holdings [TEM.UL] sold Senoko Power to a consortium comprising Marubeni Corp 8002.T, GDF Suez, Kansai Electric 9503.T, Kiyusho Electric 9508.T and Japan Bank of International Cooperation for S$3.65 billion. ($1=1.433 Singapore Dollar) (Reporting by Annika Breidthardt; Editing by Clarence Fernandez)

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