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We are an energy and integrated utilities service
provider. A pioneer in the concept of multi-utility facilities,
we offer a range of utilities and support services such as steam,
cooling water, high grade industrial water, wastewater treatment
and chemical waste incineration to Singapores petrochemical
hub on Jurong Island. A major energy player, we are Singapores
first commercial importer and retailer of natural gas and operate
the countrys only combined-cycle cogeneration plant. Our expertise
also includes offshore oil and gas turnkey contracting for upstream
fixed and floating platforms.
STRATEGY
Our aim is to be a leading energy and integrated utilities service
provider in the Asia-Pacific. To do this we will:
Create synergies between the various elements of our utilities
business
We offer our clients a full range of services by bundling our energy
and integrated utilities products and services. Leveraging our expertise
across the entire energy value chain, and on the synergies between
electricity and gas, we aim to cater to our customers energy
needs.
Develop on our unique business model as an integrated multi-utility
service provider
We intend to replicate the success of our one-stop service multi-utility
concept abroad in countries such as China. We will continue to consolidate
our lead position in Singapore by deepening our core competencies
and providing reliable, quality and customer-responsive products
and services.
Build our businesses in water and wastewater treatment
Building on our existing water recycling and wastewater treatment
capabilities, we are exploring M&As and partnership opportunities
in these businesses both locally and abroad. We will also grow new
product lines such as district cooling systems and recycled water,
and continue investing in research and development on water treatment
technologies with established institutions like Singapores
Nanyang Technological University and Stanford University in the
United States.
Leverage our first-mover advantage in Singapore's natural
gas market
To protect and increase our market share, we plan to increase gas
sales to our industrial and reticulation customers, and are piloting
the use of compressed natural gas (CNG) as an alternative fuel source
for commercial fleet operators.
Strengthen our power generation capabilities as a niche
player
We aim to strengthen our position as a low-cost power producer equipped
with high-performance and efficiency facilities. We will focus on
niche markets which provide a stable income such as cogeneration
facilities with multi-steam customers, as well as power plants with
secured offtakes. We are currently exploring greenfield and acquisition
opportunities in Asia and Australia.
Exploit opportunities for oil and gas works
We will continue to build up our position and reputation as a leading
turnkey contractor for offshore platforms. In pursuing opportunities
to grow our offshore engineering business, we will focus on markets
of high interest to oil and gas majors such as West Africa, the
North Sea and the Middle East. We will also explore means to increase
our yard space and capacity both locally and abroad.
OPERATIONS REVIEW
Our Utilities business performed strongly in 2002, with a 95 per
cent growth in turnover over 2001. Profit After Tax and Minority
Interests (PATMI) rose 55 per cent to S$54.2 million, accounting
for 31 per cent of Group PATMI compared to 20 per cent in 2001.
The strong financial performance by Utilities was primarily due
to increased contributions from our integrated utilities division,
as well as our offshore engineering unit SMOE, and SembCorp Gas
(SembGas). SMOE performed strongly and clinched S$530 million worth
of contracts in 2002. SembGas also performed well in 2002 due to
a ramp-up in its gas offtake and it has now reached its full 325
million standard cubic feet per day (mmscfd) offtake level. SembGas
secured 30 new reticulation customers in 2002 with an orderbook
worth S$116 million, while our power supply company, SembCorp Power
(SembPower), is now an established power retail company with a total
of 80 accounts to date.
KEY OPERATING UNITS
1
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Division |
Our Stake |
Joint Venture Partners |
Country of Operation |
Project
Completion Date |
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INTEGRATED UTILITIES |
|
|
|
|
|
|
Centralised Utilities |
|
|
|
|
|
|
SUT Sakra |
80% |
Tractebel
(20%) |
Jurong Island,
Singapore
|
1997 |
|
|
SUT Seraya |
100% |
– |
Jurong Island,
Singapore
|
2000 |
|
|
Water |
|
|
|
|
|
|
SembCorp Water
|
100% |
– |
Singapore |
– |
|
|
Chemical Feedstock |
|
|
|
|
|
|
Propylene Purification Unit
|
100% |
– |
Jurong Island,
Singapore |
1999 |
|
|
SembCorp Air Products |
60% |
Air Products Singapore
(40%)
|
Jurong Island,
Singapore |
1999 |
|
|
Sakra Island Carbon Dioxide |
30% |
Singapore Carbon
Dioxide Company
(50%)
Air Products Singapore (20%)
|
Singapore |
1999 |
|
|
ENERGY |
|
|
|
|
|
|
Gas |
|
|
|
|
|
|
SembCorp Gas |
50% |
Temasek Holdings
(30%)
Tractebel
(20%)
|
Jurong Island,
Singapore |
January
2001 |
|
|
Power |
|
|
|
|
|
|
SembCorp Cogen |
70% |
Tractebel
(30%)
|
Jurong Island,
Singapore |
September
2001 |
|
|
Kwinana Cogeneration Plant |
30% |
Edison Mission Energy
(70%)
|
Perth, Australia |
1996 |
|
|
Phu My 3 Power Company |
33.30% |
BP Holdings
(33.3%)
Consortium of Kyushu Electric Power Co.
and Nissho Iwai Corporation
(33.3%)
|
Vung Tau,
Vietnam |
January
2004 |
|
|
Qianan SembCorp
Cogeneration Company |
65%
|
Qianan
Xin Di Thermal Power Company
(35%)
|
Hebei,
China |
1996
|
|
|
SembCorp Power |
100% |
–
|
Singapore |
2nd half
2001 |
|
|
OFFSHORE
ENGINEERING |
|
|
|
|
|
|
Oil and Gas |
|
|
|
|
|
|
SMOE |
100% |
–
|
Singapore |
– |
|
|
Gema SembCorp Engineering |
90% |
Fadel Muhammad
(10%)
|
Indonesia |
– |
|
|
Chiwan Offshore Petroleum
Equipment Repair/Manufacturing Co.
|
35% |
China Offshore Oil Nanhai East Corporation (25%)
China Offshore Oil Nanhai West Corporation (20%)
Chiwan Petroleum Supply Base (20%)
|
Shenzhen,
China |
– |
|
|
Chiwan Sembawang
Engineering Co. |
32%
|
China Offshore Oil Engineering Corporation (36%)
Shenzhen Petroleum Supply Base Company (32%)
|
Shenzhen,
China |
– |
|
|
Sime SembCorp Engineering |
30% |
Sime Darby Nominees (70%) |
Pasir Gudang,
Malaysia |
– |
|
|
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1 As of December
31, 2002
ORDERBOOK 2
The orderbook for SMOE as of end-December 2002 was approximately S$740 million.
Our major projects are:
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Project |
Value (S$m) |
Client |
Scope of Work |
Completion Date |
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|
|
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Halfdan Field Development Phase 3 |
189 |
Maersk Olie OG Gas |
Engineering, procurement, fabrication, pre-commissioning, loadout
and seafastening of process platform and living quarters |
March 2003 |
|
|
|
|
|
|
|
|
|
Panyu Joint Development, South China Sea |
260 |
Devon Energy China |
Engineering, procurement, fabrication, installation and hook-up
of platform and pipeline facilities |
3rd quarter 2003 |
|
|
|
|
|
|
|
|
|
Dan FG Development Project 2 |
– |
Maersk Olie OG Gas |
Engineering, procurement, fabrication and commissioning of process/utility
module, jacket, flare structure and bridges |
July 2004 |
|
|
|
|
|
|
|
|
|
Idd El Shargi North Dome Offshore Oil Field 2 |
– |
Occidental Petroleum of Qatar |
Engineering, procurement, fabrication, precommissioning, loadout,
transportation,hook-up and commissioningof central processing
facility platform, bridges and flare platform |
March 2005 |
|
|
|
|
|
|
|
|
|
Erha FPSO Project 2 |
– |
Bouygues Offshore |
Detailed engineering, procurement, fabrication and integration
to Hull FPSO topsides modules |
March 2005 |
|
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2 The total contract
value for these three contracts secured in 2002 is S$530 million.
The individual contract values are not disclosed at the requests
of the clients.
Our multi-utility centres on Jurong Island also performed better
than the year before. SUT Sakra signed six new contracts worth S$2.6
million per year while expansion on its existing facilities continue
to cater to customers such as Asahi Kasei Plastics Singapore and
Mitsui Bisphenol Singapore. We rounded up the year serving 39 of
Jurong Islands 70 companies.
Our power generation company in Singapore, SembCorp Cogen (SembCogen),
was however negatively impacted by the delay in the deregulation
of Singapores electricity market, namely high spinning reserve
costs under the old market rules. Originally set for 2001, the New
Electricity Market (NEM) was launched only in January 2003. Under
the NEM, a separate Spinning Reserve Market has now been introduced,
and competition in this market is expected to drive down spinning
reserve costs.
Earlier this year, we opened Singapores first CNG station
on Jurong Island, and launched a pilot project with the Ministry
of the Environment and SBS Transit to introduce CNG as a vehicle
fuel in Singapore.
OUTLOOK
We expect the performance of our Utilities operations to be better
than 2002. Its growth will be underpinned by stable baseload earnings
from its long-term contracts, as well as a strong orderbook of SMOE.
The orderbook of SMOE stood at a healthy S$740 million as at end-December
2002.
Since January 2003, SembCogen has been operating under the NEM.
The introduction of a separate Spinning Reserve Market and the introduction
of vesting contracts is expected to make the market environment
more dynamic and sustainable for SembCogen and other power generation
companies in Singapore.
While Temasek Holdings has announced the deferment of the proposed
sale of its power generation companies until 2004 at the earliest,
we continue to develop our power generation business overseas. Commercial
operations of our joint venture 717-megawatt cogeneration plant
Phu My 3 in Vietnam is expected to commence in early 2004.
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Tang Kin Fei
President & CEO SembCorp Utilities
Key Facts
Glossary
Competitive
Edge
|
2002
S$'000 |
2001
S$'000 |
|
Revenue |
1,071,933 |
548,319 |
PATMI |
54,248 |
34,907 |
Note:
Figures are taken at SembCorp Industries' Group Level
for the Key Business |
TURNOVER BY DIVISION (S$m)
![](images/graph_ut1.gif)
Note: Excludes inter-company elimination
PATMI BY DIVISION (S$m)![](images/graph_ut2.gif)
Note: Excludes corporate/ development costs
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