- Secures a 15-year service agreement to serve state-owned Shanxi Lu’an Group
Sembcorp Industries (Sembcorp) is pleased to announce that it will be developing a total water management plant to support a coal-to-diesel project in Wangqiao Industrial Park, located in Changzhi city in China’s Shanxi province. This total water management plant will offer the most comprehensive range of water products and solutions, amongst the water facilities that Sembcorp has developed in China.
This total water management plant will provide up to 57,600 cubic metres per day of industrial and potable water, 81,600 cubic metres per day of demineralised water and 984,000 cubic metres per day of cooling water, and treat up to 24,000 cubic metres per day of high concentration industrial wastewater and 9,600 cubic metres per day of high salinity industrial wastewater. The plant will also be capable of reclaiming up to 38,400 cubic metres per day of water from treated industrial effluent, aiming to achieve “zero liquid discharge”. The plant is expected to be completed in phases between late 2014 and 2015.
The total water management plant will serve Shanxi Lu’an Group (Lu’an), for its one million tonnes per annum coal-to-diesel project in Wangqiao Industrial Park, under a 15-year service agreement that Sembcorp’s wholly-owned subsidiary, Sembcorp (China) Holding Co, has secured. With this service agreement, Sembcorp will be the first to build, own and operate a total water management plant to provide such solutions to large-scale coal-to-diesel projects in China. Lu’an’s project is the first large-scale coal-to-diesel project approved by China’s relevant authorities and has strong support from the Chinese government as it is part of the national energy strategy. The main products from Lu’an’s coal-to-diesel facility will be liquefied petroleum gas, naphtha and high quality diesel. Wholly owned by the Shanxi Provincial Government, Lu’an is one of the largest state-owned coal enterprises in Shanxi province and one of the top 100 enterprises in China.
This project is in line with Sembcorp’s plans to develop water projects for industries in China, where the Group aims to offer its innovative water solutions to water-stressed regions. This is the second “closed loop” total water management project that Sembcorp is developing in China, following its award-winning project in the Zhangjiagang Free Trade Port Zone. Sembcorp’s total water solutions not only help customers comply with discharge regulations and limit environmental impact, but also reduce liquid discharge and conserve precious water resources by promoting water reuse, thereby closing the water loop.
Sembcorp will invest approximately RMB932 million (S$189.9 million) to develop this new project, which will be funded by internal resources and external borrowings. Sembcorp will establish a wholly-owned subsidiary, Sembcorp Changzhi Water Co, to manage the plant.
Tang Kin Fei, Sembcorp Group President & CEO, said, “We are pleased to bring our expertise in total water management and integrated industrial water solutions to support Shanxi Lu’an Group in their coal-to-diesel facility. Besides serving their water requirements, we also help them protect the environment and conserve water resources.
“We are honoured to be selected by Shanxi Lu’an Group for this important project as it is testament to our total water management capabilities and the strong reputation that Sembcorp has built in China. This project also gives us our first foothold to tap into the coal-to-chemical sector, which includes coal-to-diesel, coal-to-gas and coal-to-alkene facilities, and we look forward to securing more projects in this sector.”
With this latest project, Sembcorp will have a presence with 23 utilities operations across 11 provinces in China, serving both industrial and municipal customers.
The transaction is not expected to have a material impact on the earnings per share and net asset value per share of Sembcorp Industries for the current financial year.
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