Syria Reaches Out to Greek-Italian Consortium to Build 700-Megawatt Combined-Cycle Power Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Syria's Ministry of Electricity's Public Establishment of Electricity for Generation and Transmission awarded a contract in September to a consortium of Metka SA (ATHEX:METTK) (Metallikes Kataskeves Ellados or Greek Metal Constructions) (Athens, Greece) and Ansaldo Energia SpA (BIT:STS) (Genoa, Italy) for the design, supply, construction and commissioning of a 700-megawatt (MW) natural-gas-fired power plant in Deir Ali, Syria. The project will require a budget of 650 million euro ($932.4 million) and is partially funded by the European Investment Bank (300 milion euro). Commercial operation should start within 36 months from the contract signature and the opening of the credit letter.

With this project award, the Metka Group has increased its backlog of projects by a further 650 million euro to stand at an overall total of 1.3 billion euro. The power plant, with a minimum power output of 700 MW, represents the key project characteristics. The civil work of the power plant will be executed by Metka, while Ansaldo Energia SpA will supply the technical equipment and gas turbines. The Metka/Ansaldo project is the largest engineering, procurement and construction project in the Metka Group's history.

A similar 860-MW project had been awarded in Romania to the Greek company in March 2008 by Romania's Petrom SA, a member of the OMV Group. This new project of Metka, a combined-cycle power plant of 860 MW in Ploiesti, Romania, has a 2+2+1 configuration with auxiliary installations and the required interconnections inside the plant. Metka is building this project with its consortium partner GE Energy, a division of General Electric (NYSE:GE) (Fairfield, Connecticut). Metka gained this contract within the context of its strategy to pursue balanced business development between the domestic market and the international arena. Metka is currently involved in eight ongoing energy projects: five gas turbines/combined-cycle projects, one hydro project, one environmental project and one other project, which all were started between 2004 and 2008.

Syria is the only significant oil producer in the eastern Mediterranean region, although production has been declining since the mid-1990s. With increasing demand and declining production, Syria could become a net oil importer by about 2015. Despite moderate gas discoveries, securing imports will be critical to meeting Syria's demand in the near future. The country's demand for electricity has grown rapidly, and some liberalization in the power sector has already attracted private capital to fund expansions of generating capacity. Upstream and downstream oil and gas sectors are controlled by the state-owned Syrian Petroleum Company (Damascus, Syria), the Syrian Gas Company and part of the Ministry of Petroleum and Mineral Resources. Since 2001, the country has reopened upstream oil and gas exploration to international oil companies through production sharing agreements. Investments in downstream infrastructure have been increasingly opened to foreign investment, particularly from China, Russia and Arab investors.

Syria is witnessing a new era of alliances between the government and the private sector. According to energy specialists, Syria's demand for electricity will reach 1,700 MW by 2010. To meet such demand, the government will need to invest in power infrastructure totaling more than $1.4 billion. In the next three years, the Ministry of Electricity plans to add 4,500 MW in generating capacity.

Metka, founded in 1962, is internationally renowned as a major Greek engineering company and is involved in the design and construction of power plants, complex metal structures and defense equipment. Ansaldo Energia is a producer of leading-edge-technology gas turbines, steam turbines and generators for large power plants.

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