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SK E&C Wins Important Overseas Construction Projects
Overseas projects promote diversification of market and business areas
SK E&C Wins Important Overseas Construction Projects
  • By matthew
  • October 15, 2009, 10:20
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SK E&C Co., Ltd. (SK E&C) is strengthening its global competitiveness through continuous overseas market expansion. In particular, the successful diversification of market and business areas has helped the company construct a stable portfolio.

Success in new market exploration.

New market exploration is occurring in the plant construction area where the company has been traditionally strong. In January 2009, SK E&C won a repair project worth approximately US$ 76 million (100 billion won) from Petroecuador, the national oil company of Ecuador. While the company has completed construction projects in other South American countries such as Columbia, this was the first time it had worked in Ecuador.

This deal was made possible thanks to consistent new market exploration and the joint efforts made by a private company and governmental agencies. The Korean Ambassador to Ecuador helped win the order and project stability was achieved based on the agreement of a 75% advance payment.

In March, 2009, the company won an order for a gas compression plant in Abu Dhabi, in the United Arab Emirates. The order worth US$ 820 million dollars (1.1 trillion won) was made by the Abu Dhabi Company for Onshore Oil Operations (ADCO).

The project aims to build three gas compression plants in Habshan, Abu Dhabi. It will be turnkey-based including EPC (Engineering, Procurement & Construction) with construction expected to take 37 months. Once completed, the daily volume of gas being processed will be 2.25 billion cubic feet (63.72 million m3).

On September 7, 2009, SK E&C entered into the Saudi Arabian plant market, winning the project to construct facilities at the ‘Jubai refinery project’. The deal is worth nearly 420 million dollars.

SATORP (SAUDI ARAMCO TOTAL Refining & Petrochemical Company), a joint venture between Aramco, the national oil company of Saudi Arabia and France’s TOTAL are behind the ‘Jubail refinery project’. The project aims to build a refinery that can dispose a daily average volume of 400,000 barrels within Jubail Industrial City 2. While the order was made in the form of various packages, SK E&C exclusively won the 5B package, a utility process. The project involves the construction of utility facilities such as the water supply system, steam and electricity supply systems, and gas supply system, etc., all of which are necessary for a refinery.

Winning this order enabled SK E&C to re-enter into the construction market of Saudi Arabia. It carried out several construction projects in the country in the 1980s but these were mostly small-scale.

With the company securing a project led by ‘Aramco’ the most prominent ordering party in the Saudi Arabian plant construction market, SK E&C expects to strengthen its position there, a country considered the representative construction market in the Middle East.

In addition, the company recently entered into a master contract for a large refinery in Malaysia, successfully exploring a new market in Southeast Asia.

The Merapoh Refinery Construction Project involves building the largest refinery in Malaysia by reclaiming land from the western coast of Kedah, a state of Malaysia. The project is expected to be worth around 7 billion dollars.

The contract entitles SK E&C to conduct basic engineering, detailed engineering, purchase, EPC, and test driving. Once reclamation is completed construction will take place. SK E&C is planning to start Conceptual Design from mid-October.

Achievements in overseas construction

Along with the area of plant construction, in March 2009, SK E&C won an order to construct C-13 Block in the ‘Al Reem Island Development Project’ conducted in Abu Dhabi. The deal amounts to US$373 million (600 billion won) with the company’s share being 65%.

This project involves constructing four building wings 31 to 51 stories high. The C-13 Block is located in the heart of Al Reem Island.

This order has helped SK E&C succeed in the overseas construction market and secure its coping capacity under the highly insecure global economy based on diversification of business areas. Bolstered by winning its largest ever overseas construction project, the company will be using it as a stepping stone to upgrade its overseas business capacity.

Exploration of overseas civil engineering market

The company is winning overseas projects based on its excellent technologies in civil engineering.

In April 2009, SK E&C won a project to construct an underground crude oil reserve in Mangalore. The order was placed by India Strategic Petroleum Reserve Limited (ISPRL), an Indian national oil reserve company.

The project is worth 4 billion Rupees (110 billion won or 90 million dollars) and SK E&C successfully won the order based on a consortium (the company’s share is 60%) with a local Indian company.

The project involves construction of an underground reserve base to store nearly 1.5 million tons of crude oil in Mangalore, a southwest port city of India. SK E&C will be responsible for civil engineering, with the project expected to take 36 months.

It is very meaningful to win an overseas civil engineering project based on technologies. The company has accumulated knowhow in underground construction through taking part in the construction of underground reserve bases in several parts of Korea. Its consistent investment in advanced technologies has given the company a unique status in the design and construction of tunnels and underground space.

In particular, the ‘SUPEX-CUT technique’ developed by SK E&C is very efficient, economical, and environment-friendly by reducing the level of noise and vibration. It has earned patents in Korea, Japan, the USA, the UK, and Australia and is recognized as one of the world’s best tunnel blasting techniques.

In June 2009, SK E&C exclusively won a project to build 915 sections in the phase 2 construction of the subway (MTR) downtown line ordered by Singapore’s Land Transportation Agency. It amounts to 230 million Singapore dollars (200 billion won).

It is to construct an underground tunnel between Beauty World Station and Hillview Station in the northwestern part of the city in the phase 2 construction. The work is expected to be completed by April 2013 and the whole project by July 2015.

By winning large-scale projects in traditionally construction-strong countries such as the Middle East (Kuwait) and Southeast Asia (Thailand), SK E&C is rebuilding its name as a power in the world’s construction market. In particular, the plant construction market is continually growing with annual overseas sales of 1-2 trillion won.

Winning projects for India’s crude oil reserve base, the Singaporean subway, and construction in Abu Dhabi are helping to strengthen the company’s overseas project portfolio regarding overseas construction and civil engineering.

The company has a short or even no construction history in these countries, which means that these achievements can be seen in terms of new market exploration. As new market exploration largely influences the expansion of sales to nearby countries where large-scale projects are being planned, SK E&C expects that its overseas competitiveness in construction will grow even more.

The company is quickly becoming a genuine top tier contender in the overseas construction market based on competitiveness in all areas of plant, construction, and civil engineering.