SK E&C Romps in
Kuwait, Saudi Arabia

Company wins huge oil refinery project in Kuwait and sets up JV in Saudi Arabia

SK Engineering and Construction Co. won a $2.08 billion contract to build an oil refining facility from Kuwait National Oil Co. on May 15, the company announced recently.
The project involves building facilities for Kuwait's fourth oil-refining factory for oil-refining processes including the recovery and compression of hydrogen and the manufacturing and recovery of sulfur.
Large-scale oil-refining factories with a capacity of 615,000 barrels are slated for construction in the Al-Zour area near the Persian Gulf for Kuwait's fourth oil-refining factory project. The total amount of the project reaches $8.3 billion. The entire project was divided into five packages, among which, four were offered for bidding. All four packages were won by Korean companies or consortiums with Korean members, including SK E&C, which won the second package.
SK E&C won the largest portion of the total project amount among single bidders. With this achievement, the accumulated amount of the company's overseas projects exceeded $10 billion.
The company has received orders exceeding $1 billion for four consecutive years, fortifying its status as the leading construction company in the plant field.
SK E&C has successfully implemented projects for KNPC starting with the propane tank recovery in Mina-al Ahmadi in 1993, and the recovery of the oil-refinery that was damaged by fire. Last year, the company launched the construction of a gas-processing facility worth $700 million, which is still underway. The company is also carrying out a facility modernization project (FMP) of an oil gathering center for Kuwait Oil Company worth $1.2 billion, the construction of a manufacturing complex for aromatic products ($1.2 billion), and the construction of a gathering center in the northern region ($600 million). SK E&C assesses that its successful project experiences and outstanding management capability has brought many projects to the company.
Another reason the company could receive substantial orders from Kuwaiti companies can be attributed to the management philosophy of the company: "Together, yet independently."The philosophy indicates that each branch company usually works 'independently,'but pulls resources "together"in an effort to win important projects.
On June 15, SK E&C announced that the company concluded a contract to establish a joint venture, Al Oula SK Construction Company, in Saudi Arabia.
Al Oula SK is jointly established with Al Oula Real Estate Development Company, which is the leading real estate developer in Saudi Arabia. The contract ceremony was held on the evening of July 14, with Yoo Woong-suk, CEO of SK, and Abdul Aziz Duailej, CEO of Al Oula Real Estate Development Company in attendance.
Al Oula SK focuses on construction in architecture, housing and civil work areas; SK E&C provides key personnel, construction technologies and know-how, and Al Oula engages in project development and marketing to receive construction orders.
Al Oula is working on the business and management plans, and the venture will be launched by the end of 2008 after acquiring a license to incorporate from the Saudi Arabian government.
In Saudi Arabia, the ratio of the population under the age of 15 is about 40 percent, and this contributes to the rapidly growing demand for housing. The government is actively investing in establishing social infrastructure, but the local construction companies lack the capacity to fully meet the demand. According to the globalization strategies of the company, SK E&C carried out surveys and analyses of the global construction markets, and decided to make inroads to Saudi Arabia. The negotiations for the establishment of a joint venture began last August.
Al Oula Real Estate Development Company: A leading real estate company in Saudi Arabia that has more than 12 affiliated companies in the Middle East region including the UAE, Kuwait, Oman and Egypt. nw

President Yoo Woong-suk of Sk E&C, 2nd R, signs a contract to set up a joint venture company Al Oula SK Construction Co. in Saudi Arabia on May 14.

President Yoo Woong-suk of SK E&C.