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Federal Int'l to supply utilities to biodiesel giant
Federal Int'l to supply utilities to biodiesel giant

(2007-06-16)

  THE world's biggest biodiesel plant on Jurong Island will get its steam and electricity supply from a Singapore company.

  Mainboard-listed Federal International (2000) - which distributes and installs electrical and marine products for the oil, gas and petrochemical industries - said yesterday that it has won a S$54 million contract to supply steam and electricity to Natural Fuel Singapore.

  Natural Fuel Singapore, a subsidiary of Australian-listed Natural Fuel, owns the US$110 million plant that can produce 600,000 tonnes of biodiesel a year.

  Federal International's 60 per cent subsidiary Banyan Utilities will build a co-generation facility to provide Natural Fuel Singapore with steam and electricity for 12 years, starting in December.

  Co-generation is the simultaneous production of electricity and steam from the same energy source - in this case, natural gas. It is considered an environmentally-friendly way to produce energy. The gas is obtained from SembCorp Gas.

  Natural Fuel and Federal International can extend their agreement for five years, with an option for a further five.

  'This milestone project underscores Federal's success in diversifying into the power utilities business,' said Federal's executive chairman and chief executive Koh Kian Kiong.

  'It is in line with Federal's goal to be an integrated service provider in the energy sector, as well as to develop businesses with sustainable and long-term recurring income.'

  Natural Fuel said yesterday the co-generation plant will help it cut operating costs 5 per cent by contributing to 'high energy efficiency'.

  Any surplus output from the S$20.5 million co-generation facility can also be sold to other parties, Banyan Utilities said yesterday. It reckons it can achieve revenues of another S$250 million from the sale of steam and electricity to other customers from its co-generation plant, over a period of 12 years. Federal's reported net profits of S$10.2 million last year, a 100 per cent increase from 2005. Its share price ended 3 cents or 4.1 per cent lower yesterday, at 70.5 cents, with 18.1 million shares changing hands.

《The Business Times》


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