Wartsila Secures Power Equipment Contracts of $56 Million in Cyprus and Greece

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Researched by Industrial Info Resources (Sugar Land, Texas)--Leading global power engineering equipment manufacturer, Wartsila Corporation (HEL:WRTBV) (Helsinki, Finland), has been awarded two contracts to increase power generating capacity in the Eastern Mediterranean nations of Cyprus and Greece. The combined power generating capacity of the two projects will be about 72 megawatts (MW). The total value of Wartsila's contracts is estimated to be about $56.4 million (40 million euros).

The first order is from Greece's government-controlled Public Power Corporation (PPC) (Athens). PPC is planning to expand the power generating capacity of its existing plant on Lesvos Island by 22 MW in order to address the increased seasonal demand for electricity. During peak tourist season, visitors to the island outnumber the 120,000 locals residing in the area. This increases the energy demand in the island.

Wartsila will also construct a power plant for Electricity Authority of Cyprus (Lefkosia, Cyprus). The firm will install three of its 18V46 engines to produce about 50 MW of electricity. The power project will be located in Dhekelia near Larnaca in Cyprus. The engines will be fitted with the latest technology, adhering to the European Union's environmental regulations to bring down carbon emissions. The engines will run on E.U.-recommended fuel oil, which has low sulfur content. The power plant will also be equipped with a reduction unit to convert various nitrogen oxides in flue gas. Wartsila is a world leader in providing environmentally friendly power plant equipment that offers not only fuel efficiency, but also the flexibility to meet increased demand.

Both projects are expected to begin operations in 2010. Wartsila's contracts in Cyprus and Greece will together add 72 MW of generating capacity to the region. With these orders, Wartsila's total power generating capacity in this region, including installed and ordered, will reach 600 MW. Wartsila has been installing and commissioning power plants in the Eastern Mediterranean region since 1986.

Recently, the company also secured two orders for projects in the Philippines. The first contract is for providing operations and maintenance (O&M) services to a cement power plant, developed by a subsidiary of CEMEX SAB de CV (NYSE:CX) (Monterrey, Mexico), located in Naga City in the Cebu province. The four-year contract includes supply and maintenance of equipment, engines, allied components, and spare parts, as well as deployment of staff. The power plant works on six 16VZAV40S Wartsila engines, generating 66 MW of power. The second order was placed by Philippines Gold Processing and Refining Corporation, which is fully owned by CGA Mining (Perth, Australia), for its power plant located in Aroroy, Masbate. This contract will cover O&M services, and supply of tools and spares. Earlier, Wartsila supplied two 16V32 and three 18V32 engines to this plant.

Wartsila also secured three contracts from independent power producers (IPPs) in Brazil for power plant conversions. The combined value of these contracts is about $68.28 million. The conversion will allow the power plants developed by Geradora de Energia do Amazonas SA (San Jose, Brazil), Rio Amazonasa Energia SA (Manaus, Brazil), and Companhia Energetica Manaura (Manaura, Brazil), to switch between heavy fuel oil and gas. Wartsila will undertake installation of control and electrical systems, gas fuel systems and compressor units. These projects, which will be located in Manaura city, are expected to be completed by October 2010. Each of these power plants, built with Wartsila's 18V46 engines, generate about 85 MW of electricity. With these orders, Wartsila's total power generating capacity in Brazil will be about 1,800 MW.

Liberty Power Technology Limited (Islamabad, Pakistan) has awarded a $194.8 million contract to Wartsila to supply equipment for its proposed 200-MW power project. The power plant, which will be located at Faisalabad, about 200 kilometers from Lahore, is expected to begin operations in 2010. This is Wartsila's fourth contract for the supply of power equipment to Pakistan. During 2007 and 2008, the company executed three IPP contracts in the country. With the execution of this contract, Wartsila's total installed power generation capacity in Pakistan will be about 1,700 MW.

Wartsila Corporation, with business interests in power equipment, shipping technology and services, employs more than 19,000 people across 160 facilities in 70 nations. During the first half of 2009, the company's net sales grew 33% to $3.66 billion. The order book value during this period was $8.29 billion, a slump of 22% in comparison to the previous fiscal year. This has been attributed to the economic slowdown and the cancellation of orders worth $219 million. Despite the financial crisis and cancellations, Wartsila is confident that new orders and the present order book value will result in a growth of 10-20% in net sales this fiscal year.

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