South Korea Pushes Multi Billion Dollar Power Plant Play in Libya

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). The trend for South Korea's engineering and construction firms to build a solid and expanding base on the Libyan projects scene has continued from 2002 into 2003.

Last year, exports of power plants and machinery from South Korea to Libya went well over $1 billion and kept running through into the current year. Before the end of 2002, LG International and LG Engineering & Construction (KSE:06360) (Seoul, South Korea) had won $280 million worth of orders for the construction of plants, Hyundai Engineering and Construction (KSE:00720) (Seoul) followed with $200 million and Hyundai Heavy Industries with $190 million and Dong Ah Industrial (KSE:08970) (Seoul) $70 million.

The Korean Trade Investment Promotion Agency (KOTRA) said that they expected the 'plant boom' to be followed by the 'construction boom' which would repeat the pattern of the 1980's in Libya.

Hyundai is hoping to sign a further $I.5 billion worth of power plant business in Libya following the recent award to them by the state's General Electricity Company (GEC) of a $283 million contract to build two steam turbines and four heat recovery generators in the existing 660 MW gas turbine power plant at Zaiwa, 50 kilometers west of the country's capital, Tripoli. Hyundai is receiving a 15 percent advance on the total price for the upgrade to a 960 MW combined cycle plant that is scheduled for completion in early 2006. The company claims that this is the biggest order placed in the Middle East since the end of the Iraq war.

Hyundai Engineering has won $2.28 billion in new orders in the first half of 2003, which is 19 percent over target. For 2003, it is targeting export orders to increase by 10 percent over 2002, with a target of $1.5 billion.

South Koreans are also engaged in the upgrading of the 450 MW Benghazi North power plant which will be converted to combined cycle and have its capacity doubled. The export-import Bank of South Korea has agreed to lend $99 million of the $299 million needed to expand the Benghazi plant.

At the end of 2002, Libya had an installed generation capacity of 4,500 MW. Currently, four power stations are being built by Alcatel-Cegelec (Paris, France), plus a 225 kV interconnection with Tunisia. Libya, Tunisia, and Egypt have a scheme linking the three national grids under discussion.

Kahromica, from Egypt, has won a contract to rehabilitate a tank farm for six power plants and there are plans to develop gas fired plants which include a 450 MW plant in Sebha, a 800 MW plant in Zuwara on Libya's western coast and a 1,400 MW plant located on the coast between Benghazi and Tripoli. A power station and desalination plant is under construction at Sirte. The GEC is currently expanding the country's substation network beyond the centers of Tripoli, Benghazi and Sebha.

Italian companies have long been building a base in Libyan gas resources and exports along with continued French interest in the north coast of Africa. The South Koreans appear to have joined the Libyan power plant party in a big way.