China Three Gorges to study developing Malaysia’s 900-MW Murum

Malaysia utility Sarawak Energy Berhad and the builder of China’s 22,400-MW Three Gorges Dam have agreed to study engineering design leading up to eventual development of the 900-MW Murum hydroelectric project in Malaysia’s Sarawak State.

Sarawak Energy reported to stock exchange Bursa Malaysia that it and China Three Gorges Project Corp. signed a memorandum of understanding August 11 to undertake a comprehensive review of Murum’s civil construction works and mechanical and electrical plant and equipment.

Sarawak Energy, which serves Sarawak State on Borneo Island, said it has been entrusted by the government of Sarawak to implement Murum, proposed for the Upper Rajang River Basin. It added that China Three Gorges has experience in planning, developing, operating, and maintaining hydropower projects, notably Three Gorges Dam. (HNN 6/13/07)

China Three Gorges is to undertake a comprehensive review of the proposed design of Murum with the objective to improve project design and achieve cost savings. It is to submit recommendations for complete engineering, construction, and commissioning of the project within three months. The Chinese firm also is to make a lump sum offer for design, construction, and trial commissioning of the project two months later.

In the event Sarawak Energy awards a development contract to China Three Gorges, the expenses of its study will be counted as part of the engineering cost component. If the Chinese firm does not receive the contract, the expenses will be paid by Sarawak Energy as consulting fees.

Malaysia’s The Edge daily quoted a source saying a consortium of China Three Gorges, Cahya Mata Sarawak, and Naim Cendera Bhd likely would be awarded the construction job. It is estimated the project could be completed by 2013 for 3 billion ringgits (US$858 million).

Malaysian builder Cahya Mata Sarawak, part-owned by the family of Sarawak Chief Minister Abdul Taib Mahmud, was identified August 7 as 40 percent partner with global miner Rio Tinto Ltd/Plc in plans to develop a US$2 billion aluminum smelter in Sarawak State that would utilize power from 2,400-MW Bakun Dam. (HNN 8/8/07)

The Rio Tinto announcement solved the problem of finding a power user for the giant Bakun project, which also is being built on Borneo, isolated from the bulk of Malaysia’s population on the Malay Peninsula. That, plus discussions on building a subsea cable to carry power from Borneo to the mainland, opens the way for potential development of Murum and other Sarawak State hydro projects.

Abdul Taib said additional power supply from new hydroelectric schemes could come on line by 2013. Bloomberg News recently reported, in addition to Murum, Sarawak Energy plans to develop three other hydro projects in Sarawak: 150-MW Limbang for US$150 million by 2012; 1,000-MW Baram for US$1 billion by 2015; and 1,000-MW Balleh for US$1 billion after 2016.

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