SK E&C on the Move

SK Group affiliate to take on brown coal-fired power plant project worth $2 bln in Turkey

SK Group signed an MOU on the construction of a large thermal power plant with EUAS, a Turkish national power company, worth $2 billion, the group said recently.
SK Engineering and Construction Co. played a big role in signing the deal by showing off its outstanding construction technologies in building the Tupan Valley thermal power plant in Turkey, the group said.
Sector Manager Shim Seong-kul of the Power Plant Business Sector, said the project is a very difficult one because the location is in a valley in a mountain range some 1,500 meters above sea level and the power plant is designed to burn brown coal, which can generate only one-fourth of the heat calories compared to bituminous coal.
The project will give the company a huge advantage in seeking the same kind of power plant projects in the Balkans and Eastern Europe, where plenty of brown coal deposits are located, the manager said.
SK E&C has been expanding its overseas Construction markets from oil refineries and petrochemical plants to power plant Construction projects in order to be more competitive.
The Tupan Valley power plant project will be the first thermal power plant in the world made to burn brown coal when it is completed in 2015 at a cost of $950 million. The power plant will have a 1.7 times bigger boiler than the average coal-burning thermal power plant and will require a lot of water for cooling. The company plans to dig wells nearby to supply water to cool the power plant.
The Paco power plant project that the company won last year to be built in the Punta Rincon region some 120 km from Panama City is worth $662 million and involves the construction of two coal-burning thermal power generators with the capacity to generate 150KW of electricity each.
Manager Shim said the project in Panama will put the company in an advantageous position to win more such projects in Central and South America, where many thermal power plants are projected to be built and where both European and U.S. construction companies have been dominant.
SK E&C has been trying to expand its overseas operation by adopting a “total solution provider” (TSP) model to secure new opportunities for winning construction projects and at the same time boosting profits from them. TSP is the operation model in which all of the group affiliates’ capacities are utilized to develop and secure projects, allowing the company to take charge of all areas of the projects from design and construction to maintenance in order to boost profits.
The Jurong Aromatic Complex project is a representative case for the TSP project in which SK E&C takes charge of design, purchase, and construction; SK Chemical is in charge of maintenance, repair, and management; and SK Gas takes care of product purchases. SK Group affiliates are major stakeholders in the project, while Korea Export-Import Bank and the Korea Trade Insurance Corp. have been providing financial support for the large-scale project.
President Casey Choi of SK E&C said the TSP business model will be a project model for the company in securing construction projects in other countries including Turkey, Egypt, and Venezuela, as well as other new construction market countries with development-type projects.

A bird's eye view of the Tupan Valley Thermal Power Plant to be built by SK E&C in Tupan Valley in Turkey.

President Casey Choi of SK E&C