Hydrochem, a wholly-owned subsidiary of Hyflux, has been awarded a $43.8 million contract by the TP Utilities, a wholly-owned unit of leading power company Tuas Power, to undertake the engineering, procurement and construction (EPC) works for stage one of the Tembusu Seawater Desalination Plant.

The desalination plant is part of Tuas Power’s Tembusu multi-utilities complex on Jurong Island. The complex also includes a cogeneration plant that will, upon completion, use a Biomass and Clean Coal (BMCC) mix to supply 1,000 tonne/hour of steam and 160MW of electricity to its customers.

The desalination plant, which will be developed in stages, will have a designed capacity to produce 182,000 cubic metres of high grade industrial water per day to be supplied to the petrochemical factories that will be situated in the Tembusu area of Jurong Island.

Work on stage one is scheduled to start immediately and is expected to be completed in 20 months.

Singapore’s first large-scale desalination plant, SingSpring Desalination Plant, which Hyflux developed on a Private-Public-Partnership (PPP) arrangement and completed in 2005, was designed to produce 136,000 cubic metres of water per day.

President and Chief Executive Officer of Tuas Power Lim Kong Puay says: “Hyflux is a reputed and experienced developer of desalination plants in Asia, so we are happy to work with Hyflux to ensure the successful completion of stage one of our Seawater Desalination Plant.”

Olivia Lum, Hyflux’s Group CEO, says: “We are pleased to be given this opportunity to work with Tuas Power. This is another springboard for Hyflux to participate in the increasing demand for large scale desalination of seawater from our customers in the commercial space of power, petrochemical and other basic resources worldwide.”

The contract for the first stage of the desalination plant is not expected to have a material impact on the net tangible assets or earnings per share of Hyflux for the financial year ending 31 December 2010.