Huge Projects Keep Rolling In

SK Construction is set to win a $12.5 bln project in Ecuador, nabs a $2.1 bln project in UAE

SK Engineering and Construction Co. is likely to secure the largest oil refinery construction project in Ecuador when the project is ordered in the middle of next year by RDP, a joint venture firm between Petro Ecuador and PDVSA, a Venezuelan national oil company. SK Construction got the order to design the 300,000 barrels per year annual capacity oil refinery in March for $260 million in the Latin American country and is sure to get the $12.5 billion Manabi oil refinery project when it is ordered in the middle of 2011, the company said.
The Ecuadorian project will be the largest oil refinery project ever won by a Korean builder overseas if SK Construction gets it. The construction firm has been counting on the Middle East and Central and South America for most of its overseas projects so far, and its efforts that have gone into those regions, especially in Kuwait and Saudi Arabia and now in Ecuador are paying off, the officials said.
The most significant part of the project is that the company won the project basic to the oil refinery construction as involved designing as it is the core part of the entire project and. Construction companies in the United States and Europe have won most of such projects so far and now SK Construction has been able to enter the arena for the first time, being one of the few construction companies in the world that can design an oil refinery with a capacity as large as 300,000 barrels per day.
Winning the contract also meant that the ability of Korean construction firms have been upgraded enough so that they can now enter regions other than the Middle East for general and plant construction projects, particularly in Central and South America.
The company recently said it won the Ruwais Oil Refinery Expansion Project Package 1 for $2.17 billion, involving the construction of a CDU (crude distillation unit) and its peripheral facilities. The company will take charge of all phases of the project including design, purchase and construction on a turnkey basis, the company said. The Ruwais Oil Refinery is located inside the Ruwais Petrochemical Complex some 250 km to the west of Abu Dhabi, the capital of the United Arab Emirates (UAE), and is capable of refining 400,000 barrels of crude oil daily. The project is scheduled to be completed in 2014 based on the contract signed with Takreer Co., an affiliate of the Abu Dhabi National Oil Co., which is part of the seven-package, $10 billion project for the oil complex. So far, two packages have been put up for open bid and SK Construction won the first package of the project.
Since March, SK Construction has won a total of $3 billion worth of construction projects in the UAE including the construction of an industrial complex for $242 million and a gas pressure project for $820 million, both in Abu Dhabi, making it a leader in the UAE construction market.
SK officials said the company finally earned its reputation as a superb engineering and construction company in the Middle East by winning and completing so many projects on time and displaying its excellent building technologies. The company will try to maintain its reputation as a wonder builder by continuing to win huge construction projects in the region.
Recently, the company was paid incentives in Kuwait for completing the oil storage construction six months earlier than projected. In March 2007 the company won the project and received the government license to build it. The contract called for a construction period of 42 months, but the company completed it in 36 months, receiving incentives totaling $29.5 million for saving on construction costs and, at the same time, winning trust from the owner of the project. The company officials said the company was able to complete the project earlier because a lot of preparation went into it including the risk management plan.
As soon as the company got the project, it launched the risk factor management system under which the potential risk factors were eliminated through impeccable preparation by the troubleshooting team.
The company also was prepared to mobilize a special crew if a construction company from a third country pulled out or local firms quit the work to make sure that the project was progressing on schedule.
The smooth coordination among builder, project owner and auditing firm also played its part in the early completion of the project, they said.
SK Construction is determined to make sure to strengthen its risk factor management system in the future, as it is a vital part of the company’s work to complete projects as large as $1 billion each.
The company will also go all out in its R&D activities to strengthen the development of engineering technologies and will expand the search for future growth engines in the area of construction engineering. Its R&D facilities at the technology center in Houston, Texas, will take on various research projects to upgrade the company’s capacity for designing such plants as oil refineries, petrochemical plants, gas plants and others. nw

(from Left) Vice Chairman Yoon Suk-kyong of SK Engineering and Construction Co. A petrochemical plant built by SKE&C in Kuwait. An apartment complex that SKE&C built in Korea.