Tuas Power signs $1b deal for South Sumatra gas
Business Times, June 12-13, 2004
Second source for power stations will prevent disruption of electricity supply to consumers, it says
Daniel Buenas
TUAS Power has signed a $1 billion 18-year contract for natural gas supply with one of Singapore 's major natural gas importer and supplier, the company announced yesterday.
The power company said that it had signed the end user agreement with Gas Supply Pte Ltd (GSPL) for its four combined cycle gas turbines beginning next April.
Under the agreement, Tuas Power will be using the natural gas supplied from South Sumatra for the commissioning - the period before actual commercial operations of the gas turbines - of its final two blocks of combined cycle plants, which are expected to be commissioned from April 2005.
The new blocks are expected to add another 735 MW to Tuas Power's current 1,935 MW capacity.
Tuas Power's current blocks of combined cycle since 2001, using gas supplied from West Natuna in Indonesia .
The company added that the gas will be delivered to its power station form the South Sumatra Gas fields via a separate pipeline.
"The supply serves as an alternative source of gas to Tuas Power Station and prevents any power interruption in the event of an upstream maintenance or outage," Tuas Power said in a statement.
Besides Tuas Power, GSPL also supplies natural gas to Senoko Power and Power Seraya.
"We are pleased to sign. (This) agreement with GSPL as it enhances the security of supply while ensuring the stability of the operations for our combined cycle gas turbines," said Lau Gar Ning, chief executive of Tuas Power.
"By reducing our risks of a shortage of gas supply, Tuas Power can ensure that power supply to consumers will not be interrupted."
Mr. Lau added that the supplementary volume the company would receive would also enhance its ability to optimize production costs.
In November last year, a leak in an underwater pipeline from the West Natuna gas fields disrupted natural gas deliveries from Indonesia to Singapore for about three weeks, forcing power generation companies here to switch to more expensive diesel fuel for their generators.
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