CPC wins TaiPower LNG deal
Friday, July 4 2003 - 05:01 AM WIB
Taiwan's CPC -- now the operator of the island's sole LNG terminal -- would source the LNG from Qatar's Ras Laffan II gas fields and begin supplying Taipower's Tatan power plant in the northern county of Taoyuan in 2008, Taipower said.
"The bid was awarded solely on price," said Taipower Vice President Edward Chen, dismissing speculation that political considerations were involved.
CPC had submitted the lowest bid, valued at T$298.2 billion (US$8.7 billion), Chen said.
Taiwan is Asia's third largest consumer of LNG after Japan and South Korea, consuming 5.9 million tonnes in 2002 of which nearly all was imported.
The Taipower deal was hotly contested as natural gas demand is expected to rise 8.5 percent each year in Taiwan over the next 20 years.
Failed bidders include a Royal Dutch/Shell venture, a Taiwan-Japanese consortium called Tung Ting Gas Corp that included Mitsubishi Corp , Osaka Gas Co Ltd and Kansai Electric Power Co Inc , and United Resources Inc, a venture led by Kuo Yang Construction that had planned to source LNG from BP-operated Tangguh.
LNG made up only six percent of Taiwan's total energy needs in 2001, a figure that was doubled last year. The government says there will be one private natural gas-powered plant coming onstream in 2003 and three the next year.
Taipower said in a statement the plant would lower its energy costs, as the state utility would be paying CPC T$5.69 per cubic metre of LNG, cheaper than the current T$8.33.
CPC is also required to build a receiving terminal for the Tatan plant as a part of the contract.
The plant, with six generating units, will be Taiwan's largest gas-fired power plant when completed.(*)