22 Jan 2002 – Malaysian state power producer Tenaga Nasional Bhd (TNB) and SKS Ventures Sdn Bhd Monday signed an agreement to go ahead with the construction of the 2100 MW coal-fired power plant originally planned for Pulau Bunting in Yan, Kedah but now destined for a new site at Tanjung Bin near Gelang Patah, in the southern state of Johor.

TNB Chairman Datuk Dr Jamaluddin Jarjiis explained that the new site had advantages in terms of better reliability and stability to the national grid supply network, in particular, the demand-supply balance for the southern region.

“The new site offers ease of fuel transport and lower cost of construction in view of the available port facilities within the locality. The relocation also brings down the shipping cost for fuel to its lowest and this will have a significant effect on the pricing as tariff in the power purchase agreement with the independent power producers is determined by this cost factor,” he said.

The new plant will go into commercial operation in 2006 and will contain three 700 MW turbines. Jamaluddin said the power plant would be connected to TNB’s national grid via the new 500kV and 275kV conventional outdoor substations at Tanjung Bin and an existing 275kV conventional outdoor substation at Bukit Batu in Johor.

The parties had agreed to enter into a supplemental agreement to the asset sale agreement (ASA) dated July 31, 2001, and a supplemental agreement to the power purchase agreement, also dated July 31, 2001, to reflect the change in the parameters of the proposed divestment, as mutually agreed by both parties in writing.

The heads of agreement will expire on March 31, 2002, or upon the signing of the supplementary agreement ASA, whichever is earlier, TNB said in a statement to the Kuala Lumpur Stock Exchange.