Marubeni Secures $124 Million Contract for Thailand's 220-Megawatt Gas-Fired CHP Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Marubeni Corporation (TYO:8002) (Chiyoda-ku, Japan) has secured a $124 million contract to build a combined heat and power (CHP) plant in Thailand. The deal has been awarded by Thailand's petrochemical manufacturer, IRPC Public Company Limited (BAK:IRPC) (Rayong, Thailand), which has planned a series of investments to be made during the next five years in a bid to fortify its business in the region.

The proposed CHP plant will run on a feedstock of natural gas and generate up to 220 megawatts (MW) of power and 400 tons per hour of steam. The plant is scheduled for commissioning in May 2011. Power generated at the facility will cater to the requirements of IRPC's integrated petrochemical complex in Rayong. The project is part of IRPC's five-year development plan, under which the company is expected to invest about $1.2 billion.

IRPC is looking to overhaul its business across production units, asset management units and administration units, including programs highlighting corporate social responsibility and environmental management. The company also has switched from the use of fuel oil to natural gas for steam production.

Other measures are being planned to maximize earnings and reduce costs. IRPC is planning to offer services to other companies at its deep-sea ports in a bid to optimize capacity utilization at these facilities. It is also planning to diversify into land development, creating industrial estates in the Rayong province. Surplus land may be eventually sold. Compliance with Euro 4 emission standards, expansion of oil refinery capacity by 20%, and expansion of plastic pellet production capacity are a few other targets set for this year.

Marubeni enjoys a strong presence in Thailand, having already worked on two combined cycle power projects for Electricity Generating Authority of Thailand (EGAT) (Nonthaburi, Thailand). Marubeni, along with Siemens AG (NYSE:SI) (Munich, Germany), secured a turnkey contract in 2006 for developing the 700-MW Bang Pakong combined-cycle power plant. Under the contract, Siemens supplied turbines and other plant equipment, while Marubeni supplied heat-recovery systems and balance of plant equipment, and undertook civil works and installation. The same team also was awarded the contract for the 700 MW Songkhla combined-cycle power plant. The Songkhla plant was due to be brought online last year, while construction of the Bang Pakong plant was slated for completion in March this year.

In collaboration with global engineering and construction firm Black & Veatch Holding Company (B&V) (Overland Park, Kansas), Marubeni secured the engineering, procurement and construction contract for the 382-MW gas-fired combined-cycle cogeneration plant from Glow Energy Public Company Limited (BAK:GLOW) (Bangkok, Thailand). The plant will be developed in the Map Ta Phut industrial zone in Rayong, and is expected to be completed by September 2011. In the cogeneration mode, the plant will have the capacity to produce 342 MW of electricity and 120 tons per hour of steam, while in the full condensing mode it will have an output potential of 382 MW of electricity. B&V will manage the technical aspects of the projects, and Marubeni will be responsible for commercial activities, such as the awarding of procurement and construction subcontracts.

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