WITH the market rebound and petrochemical investments once again returning to Jurong Island, a 'power battle' is shaping up at the island's greenfield Tembusu sector.
Following last November's move by Tuas Power - now under China Huaneng Group - to build a mega $2 billion clean coal/biomass cogen plant there, local player Keppel Corp is also looking to expand its Tembusu cogeneration plant to supply utilities there.
'We are currently planning the capacity expansion of Keppel Merlimau Cogen and look forward to the planting,' Ong Tiong Guan, managing director of Keppel Energy, told BT, but gave no further details.
Still, this is the first firm indication in a while by Keppel Energy of its plans for the 500-megawatt Keppel Merlimau Cogen station which first started operations in 2007.
With a licensed capacity of 1,400 MW, Keppel Energy had indicated to the Energy Market Authority as far back as 2006 that it planned to add a 450 MW combined cycle plant this year, followed by another similar sized unit in 2011. But it has kept mum on these plans till now.
Each 450MW plant investment could cost upwards of $400 million, going by industry indications.
BT understands that natural gas feedstock needed for the cogen expansion 'is not an issue', especially since Keppel Energy has a $3 billion-plus deal with Petronas covering the import of 115 million standard cubic feet of gas daily for 18 years.
The Tembusu sector is where Germany's Lanxess is starting to build its $800 million synthetic rubber plant.
Other investors are also trying to restart stalled projects, with Jurong Aromatics Corporation, which is planning a US$2 billion petrochemical complex, also understood to be negotiating its utilities supplies.
Local power players like KepCorp and Sembcorp had earlier indicated that they would prefer to secure customers first before embarking on plant expansions, although by so doing, they face the prospect of losing out to early movers like Tuas Power.
Sembcorp, which has an 815-MW cogen plant on Jurong Island, earlier indicated that it would make an investment decision by end-2009 on another utilities plant, this time using waste-to-steam technology, at Tembusu.
It has missed that deadline, but BT understands that the project is still very much on the cards. A Sembcorp spokeswoman said yesterday that 'we are still exploring doing the investment'.
Meanwhile, new cogen capacity, including from PowerSeraya - now under Malaysia's YTL Group - is coming on stream.
The 3,100 MW PowerSeraya embarked on an aggressive expansion into cogeneration in 2007 - to provide other utilities like steam and cooling water, asides from just power - on Jurong Island.
Its $800 million investment to build a new 800 MW cogen plant plus conversion of two 750 MW combined cycle gas turbines into cogen units are scheduled for completion around this time, which will make PowerSeraya the largest cogen player on Jurong Island with a total 1,550 MW of cogen capacity.
Tuas Power said that in tandem with customer demand, its clean coal/biomass cogen project at Tembusu will be carried out in two phases, with part of the cogen plant ready in 2012 and the rest by 2014.
The facility will produce 180 MW of electricity and about 900 tonnes of steam per hour. It includes a 20 million gallons per day desalination plant and wastewater treatment facility.