IN early December, engineering, procurement & construction contractor, GS Engineering & Construction (GS E&C) was awarded the US$3.11 billion Ruwais Refinery Project from Takreer, a subsidiary of Abu Dhabi National Oil Company (ADNOC), a government-run company of the United Arab Emirates (UAE). GS E&C will construct the Residue Fluidized Catalytic Cracking Unit (RFCC) process, the main process of the project. The amount, US$3.11 billion, is the highest-ever for a Korean builder. The project is in the Ruwais Petrochemical Industrial area 250 km away from Abu Dhabi. Construction will begin in December and be completed in January 2014.
GS E&C will carry out the entire process of the project, from design and purchasing, to construction and test operations. The project is expected to bring 900 billion won in sales to the builder. GS E&C is expected to cement its dominant position in the UAE plant market through this project. The UAE ranks sixth and fifth, respectively, in terms of the biggest oil and natural gas reserves in the world.
At the beginning of 2009, the Plant Business Division of GS E&C set 3.8 trillion won in overseas orders as its goal. However, this huge deal is expected to increase its orders to more than seven trillion won. In addition, overall, GS E&C’s sales have been brilliant this year, enjoying balanced growth in all business sectors. The builder generated the biggest sales profit ever in the first half of this year in spite of tough business conditions, posting 277.3 billion won in operating income and 3.8694 trillion won in sales during the first half of 2009, a rise of 13% and 29%, respectively.
Furthermore, at the end of June, GS E&C won a US$1 billion liquefaction package project in Iran. The builder formed a consortium with Pideco, an Iranian company to take part in the bidding. This consortium strategy proved successful, as one month later GS E&C received a Letter of Award (LOA) for a natural gas plant project from Abu Dhbi Industries Ltd of the UAE.
Between June and July, GS E&C won two gas plant orders valued at approximately US$3.2 billion. In this manner, GS E&C is strengthening its competitiveness by taking the lead in the gas plant sector. In particular, construction of LNG liquefaction plants has become the specialized area of a few advanced companies in Europe, the U.S. and Japan. Korean companies have in the past remained as subcontractors to these advanced players. However, GS E&C has now broken the barrier for Korean companies.
“GS E&C proved its technological excellence by winning the RFCC project, a project with the world’s biggest production capacity,” said Jang Moo-ik, vice president of GS E&C. “It is a great feat not only for GS E&C but also for the Korean construction industry. We expect this project to give GS E&C a stronger competitive edge in the big oil refinery and gas plant construction projects in the Middle East in the future.”