International Power Announces Second Power Project in Thailand

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Researched by Industrial Info Resources (Sugar Land, Texas)--International Power plc (OTC:IPRPY) (London, England) has entered into an engineering, procurement and construction (EPC) agreement for the Thai National Power 2 (TNP2) project in Thailand. The 110-MW, gas-based cogeneration plant will be close to the first 143-MW, gas-fired TNP plant in Pluak Daeng, which is also owned and operated by International Power.

In addition to the EPC deal, International Power has signed a long-term power purchase agreement with Energy Generating Authority of Thailand (EGAT) (Nonthaburi, Thailand), under which about 90 MW of power generated from TNP2 will be offloaded to EGAT for 25 years. The remaining 20 MW of power has been earmarked for sale to industrial users.

The TNP2 plant, slated for completion in 2012, is estimated to cost about £82 million (US$130.54 million). The project is being financed through a new loan of £76 million (US$121 million), while International Power will contribute the balance £6 million (US$9.55 million). Investments across the TNP and TNP2 projects have been funded in a debt-to-equity ration of 75:25. Bank of Ayudhya (SET:BAY) (Bangkok, Thailand) and Kasikorn Bank (SET:KBANK) (Bangkok) are the financers for the venture.

The new plant, to be established as a fully owned subsidiary of the first project, will use one of the recent gas turbine models from General Electric Company (NYSE:GE) (Fairfield, Connecticut): the LM6000PF, a variant of the LM6000 dual-rotor turbine range adapted from GE's CF6-80C2 turbofan aircraft engine. Capable of outputs in the range of 43 MW to 50 MW, the LM6000PF (50 hertz and 60 hertz) works on different technologies such as Spray Inter-cooling (Sprint), water injection and steam injection, depending on actual usage.

TNP's cogeneration technology uses waste steam for the production and supply of chilled water by employing steam-fired absorption chillers. Its first 120-MW project was expanded in 2006 to add a 23-MW project and a chilling plant, which has a capacity of 2,200 refrigeration tons.

The TNP2 project will be executed on a turnkey basis by Jurong Engineering Limited (Jurong Town, Singapore), a subsidiary of Ishikawajima-Harima Heavy Industries Company Limited (Tokyo, Japan). Under a long-term gas supply contract, Petroleum Authority of Thailand (Bangkok, Thailand) will cater to the natural gas requirements of the venture for the next 25 years.

Over the past two years, development projects in Thailand have been delayed due to new regulations that require all projects to undergo environmental impact assessments (EIA). Until late 2009, most projects remained stalled due to unclear EIA requirements. However, clean energy ventures have received an impetus, and several trial ventures were executed. Power equipment imports from India and China are under way, and several large projects are slated to commence by the end of this year. It has been reported that Thailand is looking to augment its clean energy production to 5,500 MW by 2020 from its present output of 1,750 MW. The country is also gearing up for the development of two 1,000-MW nuclear power plants. However, regulations for the same are yet to be formulated.

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