Fluor to Rebuild ERG's Damaged Combined-Cycle Power Unit in Sicily

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Researched by Industrial Info Resources (Sugar Land, Texas)--Fluor Corporation (NYSE:FLR) (Irving, Texas) has secured an engineering, procurement and construction (EPC) contract for reconstruction of a damaged 266-megawatt (MW) power-generating unit in the ISAB Nord refining facility at Priolo Gargallo in Sicily, Italy. The total cost of the project is estimated to be more than $150 million. The contract was awarded by ISAB Energy, a subsidiary of ERG SpA (BIT:ERG) (Genoa, Italy), which operates the power plant.

The 532-MW integrated gasification combined cycle (IGCC) power plant, comprising two units of 266 MW each, was damaged in mid-October last year after a fire occurred in one of the units. The power plant was shut down through the end of December. The accident did not have any impact on the ISAB Nord refinery, which continued operations. According to reports released at the time, one of the units was expected to resume operations in January 2009, while the other unit was expected to remain offline throughout 2009. ERG also said that it expected to restart the second unit within the 20-month limit of insurance coverage. ERG holds a 51% stake in ISAB Energy, while a consortium of International Power plc (OTC:IPRPY) (London, England) and Mitsui & Company Limited (NASDAQ:MITSY) (Tokyo, Japan) holds the remaining 49%.

Fluor's operations center in Camberley, England, will be responsible for designing a refurbished plant that corresponds with the original plant's design. The project will engage local labor for construction activities onsite. Fluor expects to execute the contract and restore full power generation capacity of the damaged unit by the end of the first half of 2010.

The ISAB Nord refining facility is part of the Syracuse petrochemical complex at Priolo Gargallo, one of the largest in Europe in both size and complexity. The refining supersite, named ERG Raffinerie Mediterranee, consists of the ISAB Nord and the ISAB Sud plants, which are connected to each other by oil pipelines and have a combined refining capacity of 320,000 barrels per day. In December 2008, all the assets of the refining complex were transferred to ISAB Srl, in which ERG holds a 51% stake and Lukoil (OTC:LUKOY) (Moscow, Russia) holds the balance. Fluor is reportedly providing select operations and maintenance services for the refining facility.

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