Alstom Powers Thailand's $900 Million Kaeng Khoi Project

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). After ten years of project specification changes and delays incurred by policy decisions, the Kaeng Khoi 2 power project in Thailand is underway. Alstom (OTC:AASTF) (Paris, France) has been awarded the project contract for the 1,468-megawatt (MW) combined-cycle gas turbine power plant, which will have two 734 MW generating blocks, each consisting of two GT26 sequential gas turbines, two associated heat recovery steam turbines, and generators. The first block is scheduled to start operation in March 2007 and the second block in March 2008. The generator units will be capable of operating on natural gas and liquid fuel.

The $900 million contract was placed by Mitsui and the plant's owner, Gulf Power Generation Company (GPP). Gulf Power is a wholly-owned subsidiary of Gulf Electric Public Company, an independent power producer owned by Japan Electric Power Development Company (J-Power) (49%), and the independent Electricity Generating Public Company (EGCO)(50%), and Mit-Power (Thailand) (1%). J-Power is a joint company held between Hitachi and Sumitomo (Tokyo:8053 ).

Gulf Power was originally established to build, own, and operate a 734 MW coal-fired plant on the Gulf of Thailand. This was to be one of the seven power projects selected by the Thai government to participate in Thailand's first independent power producer program (IPP). The government then decided that Gulf Power should develop a 1.468 MW gas-fed power plant in Sariburi Province instead of the coal-fired plant in Prachuab Khiri Khan Province.

Bringing the project to a successful launch is seen by industry observers as a strong sign of confidence in Thailand's long-term strategy for expanding electricity generation, says White & Case the lead partner in the project financing transaction.

GPP has also signed a $78 million, 25-year purchase agreement with the state's fuel utility PTT, for the supply an average of 125 million cubic feet per day natural gas to Kaeng Khoi during the first phase. That amount will be increased to 250 million cubic feet per day in 2008, when the second unit comes online.

The 1,468 MW output from the plant will play a vital role in helping to meet the country's growing demand for electrical power. This is forecasted to grow to 41,000 MW in 2015, based on forecasted annual growth of 6 to 7%. Average consumption in Thailand currently requires 19,300 MW.

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