Indonesia's Medco to build S$55 million green power plant in Singapore

Indonesian oil and gas producer PT Medco Energi Internasional Tbk said Thursday one of its units, Medco Power Venture Ltd. (MPV), has entered into an agreement with two Singapore companies to build a 24.9-megawatt biomass power plant in Singapore.

The two Singapore companies are Biofuel Industries Pte. Ltd. and Biofuel Services Pte. Ltd.

Construction of the power plant is expected to take 24 months to complete, with a total estimated project cost of S$55 million.

Medco Energi said Industrial Power Technologies has been appointed as the engineering, procurement, and construction (EPC) contractor to build the power plant, which is expected to commence operations in mid-2008.

MPV will hold a majority stake in the power plant, Medco Energi said.

The project will consist of two 9.9-MW power plants that will generate and transmit electricity to Singapore's SP Power Grid, and a 5-MW generator for internal consumption that will power the fuel preparation operations.

"When completed, it will be one of the largest privately-owned power plants in Singapore," Medco Energi said.

The plant has the potential of generating up to 135,000 units of carbon credits, making it one of the largest carbon credit holders in Singapore, it said.

Revenue and sustainability of the power plant will come from electricity sales to the Energy Market Company, which operates Singapore's wholesale electricity market.

Revenue will also be derived from the sale of certified emissions reduction (CER) credits to global customers who are interested in lowering their carbon footprint on a voluntary basis under the United Nations' clean development mechanism, Medco said.

"With growing awareness of the harmful effects of pollution, there has been strong demand across the region for environmentally-friendly energy resources," said Fazil Erwin Alfitri, CEO of Medco Power.

"These agreements with Biofuel will enable us to build on our capabilities in the operation, maintenance and procurement services of green power plants, and strengthening our position as a leader in this field," Alfitri said.

MPV is an investment company wholly owned by PT Medco Power Indonesia (MPI), also a unit of Medco Energi. MPI's businesses include thermal power plants, renewable fuel power plants and power plant services.

MPI currently owns majority stakes in and operates three gas-fired power plants with a combined capacity of 150 MW in Batam, Indonesia, and is now developing a 330-MW geothermal power plant in Sarulla, North Sumatera, Indonesia.

In power plant services, MPI operates and does maintenance work for the 1,320-MW Tanjung Jati B coal-fired power plant in Indonesia.