First Generation Company In Singapore To Offer Multi-Fuel Options

First Delivery of Orimulsion – A New Alternative Fuel Source

11 April 2005, Singapore – PowerSeraya Ltd today received its first delivery of a new alternative fuel, Orimulsion, making PowerSeraya the first generation company in Singapore to provide multi-fuel options offering a more cost effective and diversified supply of electricity in Singapore.

The introduction of Orimulsion as an alternative fuel to conventional fuel oil and natural gas is part of PowerSeraya’s multi-fuel strategy to drive greater efficiency and provide more fuel security for Singapore.

“Our multi-fuel strategy is an innovative way of offering more efficient and affordable electricity to our customers as well as to providing greater risk mitigation against fuel disruptions. It is part of our long term commitment to Singapore and our first shipment of Orimulsion today is a significant milestone for us,” said Mr Neil McGregor, Managing Director of PowerSeraya.

The switch to Orimulsion comes at a time when the Government is looking at ways of diversifying Singapore’s energy sources to ensure our electricity supply remains efficient and competitive while containing its impact on the environment. The move by PowerSeraya will help meet these goals in the short and medium term while the Government explores other longer term options such as LNG and fuel cell power generation.

An Innovative Move to Reduce Cost Structure and Offer Competitive Pricing

“The introduction of Orimulsion as an alternative fuel source not only reduces an over- reliance on heavy fuel oil and natural gas but also enables us to enjoy significant cost savings and allows for more competitive pricing flexibility with our customers through our retail arm Seraya Energy,” Mr McGregor added.

The upgrading the existing three units of 250MW steam plants to enable a switch to Orimulsion maximises existing infrastructure and minimises the need for major new “Greenfield” construction projects, making the innovative multi-fuel option both cost efficient and environmentally- responsible.

Environmental Impact

Anticipating the need for change, PowerSeraya began exploring the use of Orimulsion as an alternative fuel source in 1998. Feasibility studies and pilot runs were subsequently conducted over the past five years to ensure that the highest international and local health, safety and environment regulations were met.

An Environmental Impact Assessment was conducted prior to the implementation of the project to ensure any environmental impact associated with the use of Orimulsion was addressed. The results showed that Orimulsion’s impact on the environment was minimal.

To date, PowerSeraya has invested more than S$100 million in state-of-the-art emission control equipment which reduces SO2 emissions by 95% and particulate matter by over 97%. This makes Orimulsion a cleaner option for powering the steam plants than conventional fuel oil.

When looking at the entire power generation operation, this contributes to a reduction of about 50% in overall emissions from the Jurong Island-based plant.

Delivery of Orimulsion

The first consignment of 80,000 metric tons of Orimulsion from Venezuela will be used to fire the first Orimulsion unit at the plant over the next few months PowerSeraya aims to have three units of 250MW steam plants fired on Orimulsion by end 2005 and expects an annual delivery of up to 1.8 million tonnes of Orimulsion. The three Orimulsion- powered plants will add to PowerSeraya’s present generation capacity of six units of 250MW steam plants running on conventional fuel oil and two units of 370MW combined cycle plants running on natural gas.

The firing of the first Orimulsion plant is expected to take place in June 2005.

-ends-

About Orimulsion
Orimulsion is a water-based fossil fuel consisting of naturally- occurring bitumen and can be used in place of conventional fuel oil and natural gas. Orimulsion is relatively easy and safe to produce, transport, handle and store. Use of state-of-the-art emission control equipment reduces the emissions from Orimulsion combustion to levels below the emissions from conventional fuel oil combustion.

Orimulsion is imported from Bitor, a subsidiary of the state-owned corporation of Venezuela, PDVSA, which is one of the four largest energy companies in the world. It has been used successfully for over 10 years in countries such as Canada, Italy and Japan.