MAN Ferrostaal Secures $700 Million EPC Contract for 760-Megawatt Power Project in Trinidad

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Researched by Industrial Info Resources (Sugar Land, Texas)--MAN Ferrostaal AG (Essen, Germany), an international provider of plant construction and engineering services, recently secured an engineering, procurement and construction (EPC) contract valued at $700 million from Trinidad Generation Unlimited (TGU) (Port of Spain, Trinidad & Tobago) to develop a gas and steam power plant with a generation capacity of 760 megawatts (MW) in La Brea, Trinidad. MAN Ferrostaal will implement the project in phases over a period of 30 months. The project is scheduled to come online at full capacity in mid-2011.

The proposed power plant at La Brea will consist of two steam turbines and six gas turbines in a configuration that will allow the plant to operate in two modes: the open cycle mode without steam and the combined cycle mode with steam. In order to comply with the region's environmental regulations, the power plant will also be equipped with an air-cooling system that will preclude the need to harness seawater for cooling systems. Plant components and services are being procured from local vendors and from firms in Brazil, China, Mexico, Venezuela and the U.S. MAN Ferrostaal has already procured equipment and components worth $250 million.

The government of the Republic of Trinidad and Tobago, which is also funding the project, established TGU for the La Brea power project. The project will address the increasing power requirements of the region, which has an established industrial base in energy-intensive sectors such as metallurgy, oil and gas, and petrochemicals, supported by the vast reserves of oil and natural gas available locally. In 2008, the Republic of Trinidad and Tobago had a per capita gross domestic product (GDP) of more than $19,700, the highest in Latin America and the Caribbean.

Demand for power in the Republic of Trinidad and Tobago is expected to grow 40% by 2010. According to data from the U.S. Energy Information Administration, the region had an installed power generation capacity of 1,416 MW at the end of 2005. Net power generation amounted to 6.63 billion kilowatt-hours (kWh), while consumption amounted to 6.16 billion kWh. Upon commissioning, the La Brea power project is expected to increase the region's installed power generation capacity by 50%.

MAN Ferrostaal is a subsidiary of MAN AG (FRA:MAN) (Munich, Germany), Europe's third largest manufacturer of trucks. The International Petroleum Investment Company (Abu Dhabi, United Arab Emirates), a state-run investment company, recently acquired a 70% stake in the firm in an all-cash deal valued at $670.1 million. With operations in more than 60 countries and a workforce of nearly 4,200 employees, MAN Ferrostaal posted an annual turnover of over $2.19 billion in 2008. The EPC contract for the La Brea power project will enable the firm to extend its presence in the global electric power market, which is expected to grow in demand from 3,700 gigawatts (GW) in 2002 to 7,300 GW in 2030. Late last year, the firm secured a contract valued at more than $904 million to set up two power projects in Venezuela.

MAN Ferrostaal has an established presence in Trinidad, where it was involved as co-financer and EPC contractor in the development of six ammonia and methanol plants. The firm is currently setting up a chemical plant in the region to manufacture ammonia, melamine and urea. MAN Ferrostaal's total investment in the region, estimated at $3.5 billion by the end of 2009, is set to increase to $4.2 billion by 2011.

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