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Federal unit wins $54m deal to supply fuel
Federal unit wins $54m deal to supply fuel

(2007-06-16)

  A UNIT of Federal International (2000) has signed a $54 million deal to supply steam and electricity for Natural Fuel Singapore's bio-diesel facility.

  The contract for the unit, Banyan Utilities, is for 12 years starting this December, said a Federal statement yesterday.

  Singapore-based Banyan will build what is known as a co-generation facility at a cost of around $20.5 million in order to supply the electricity and steam. This will be funded by internal resources and bank borrowings.

  Co-generation is an environmentally-friendly process that generates lower emissions while being more efficient at producing energy.

  The 5MW facility will be in the same Jurong Island compound as Natural Fuel's US$110 million (S$154.3 million) biodiesel project and is expected to be operating by early next year.

  Natural Fuel's biodiesel plant, which will have an output of 600,000 tonnes a year, starts production at the end of the year.

  It will rely on temporary portable facilities for its energy needs until the Banyan plant is up and running.

  'This co-generation facility will be the first of its type at the Jurong Island industrial complex,' said Natural Fuel managing director Richard Selwood. 'It is designed to use a combination of natural gas, and biodiesel and waste products from Natural Fuel Singapore's biodiesel plant.'

  Mr Selwood said using renewable resources will contribute to 'exceptionally high energy efficiency' and will allow the firm to cut operating costs by about 5 per cent.

  Federal executive chairman and chief executive Koh Kian Kiong said the project 'is in line with (the firm'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 streams'.

  Banyan is 60 per cent owned by mainboard-listed Federal.

  The agreement is not expected to have any material impact on Federal's earnings per share and net tangible assets per share for the financial year ending Dec 31.

  Federal shares fell by three cents to 70.5 cents yesterday after trading resumed following a suspension for the announcement.

《The Straits Times》


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