Contractors Unlimited

Keppel Secures Contract to Build Energy-from-Waste Plant

Keppel Seghers Keppel Seghers Belgium N.V. and Keppel Seghers UK Limited (collectively, Keppel Seghers), the environmental technology division of Keppel Integrated Engineering Limited (KIE), have secured an Engineering, Procurement and Construction (EPC) contract worth approximately GBP 233 million(1) (or approximately S$ 518 million), to build an Energy-from-Waste Combined Heat and Power Plant (EFW CHP plant) to serve the Greater Manchester region in the UK. This will be one of the largest waste and renewable energy projects in the UK.

The EFW CHP plant is part of a Private Finance Initiative (PFI) waste management project by the Greater Manchester Waste Disposal Authority (GMWDA). Keppel Seghers will provide the technology and also build the plant for Ineos Runcorn TPS Ltd, a special purpose vehicle which was set up for the procurement, operation and maintenance of the plant. Ineos Runcorn TPS Ltd, is owned by Viridor Waste Management Limited, John Laing PLC and Ineos Chlor.

Featuring the Keppel Seghers Water-Cooled Grate, the horizontal boiler design integrated with Keppel Seghers Prism technology (for enhanced heat recovery) and the Keppel Seghers' double dry flue gas cleaning system, the EFW CHP plant will be one of the larger EFW facilities in the UK when completed in 2012.

The EFW CHP plant will have a capacity to treat up to 420,000 tonnes per year of solid recovered fuel derived from household waste (also known as refuse derived fuel or RDF), and will be able to supply at full capacity some 270,000 MWh of electricity and 500,000 tonnes of steam per year into the internal network of the Ineos Runcorn site. Approximately 275,000 tonnes of RDF will be delivered by GMWDA and the remaining will be delivered by Viridor.

Mr Chua Chee Wui, Chief Executive Officer of KIE, said, "The Greater Manchester Waste project, which we have been working on with our partners since 2005, is the largest privatisation project in the EU waste management and renewable energy market.

"Winning this green project against the backdrop of a global credit crunch is a clear indicator of the financial credit quality in addition to the technological strength of Keppel Seghers. It also reinforces Keppel's leadership position as a world class technology solutions provider in waste management and renewable energy."

The EFW CHP plant will enable GMWDA to divert one of the highest levels of waste from landfill among all local authorities and contribute significantly towards meeting UK's targets under the European Union (EU) Landfill Directive as GMWDA handles 5% of UK's municipal waste. The energy produced from RDF is also a recognised form of renewable energy.

The EU Landfill Directive requires a reduction in municipal solid waste being disposed of to landfill and that municipal solid waste are treated to reduce the biological content prior to landfilling. The Directive will drive demand for alternatives to landfill such as Energy-from-Waste solutions as well as demand for municipal solid waste pretreatment solutions. Keppel Seghers Group offers technology solutions for both Waste Pre-treatment (Keppel Seghers DANO Drum®) and Energy-from-Waste.

The above-mentioned contract is not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year.

(1) Contract Value is split into GBP 135.7m, and Euros 107.3m.

Posted 10/04/09

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