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SINGAPORE: Energy provider Tuas Power officially opened its S$2 billion utility complex on Jurong Island on Wednesday.

At the opening ceremony, Trade and Industry Minister Lim Hng Kiang said the plant has catalysed investment decisions by specialty chemical firms like Lanxess and Dairen.

The utilities plant, which runs mainly on low-sulphur coal and biomass like palm kernel shells and wood chips, is a critical piece of infrastructure on Jurong Island.

Since becoming operational in August last year, the facility produces steam and electricity to surrounding industries on the island.

It also provides water treatment facilities.

Mr Lim said: "With integration, companies are able to obtain feedstock and utilities, and supply finished products to other companies co-located with them on the island. In this context, Tuas Power's centralised utilities facility will strengthen Jurong Island's integration efforts."

Excess electricity will be sold through the Singapore electricity market. A desalination plant is also expected to be up and running by 2017.

According to Tuas Power estimates, operational costs of a coal-biomass power plant is 10 per cent less than a gas-fired plant, supplying cheaper utilities including steam to nearby synthetic rubber plants, which had to cope with high energy costs in Singapore.

Huang Yongda, executive vice president of China Huaneng Group, said: "This project is of great significance for Singapore to diversify its energy sources and increase its attraction for investment on Jurong Island. It is also of great importance for China Huaneng Group to deepen its international operations."

The S$2 billion facility is believed to be the largest investment by a Chinese company in Singapore. Tuas Power, which runs the facility, was acquired by the New York-listed Huaneng Power International in 2008 - two years after the plant was conceived.

- CNA/xq