Hyundai Heavy Industries and Sidem win USD 1.4 billion Az-Zour North Project in Kuwait
Hyundai Heavy Industries (HHI), the world’s biggest shipbuilder and a leading industrial plant contractor, and Sidem, a subsidiary of Veolia Water Solutions & Technologies, announced the signing of a USD 1.4 billion EPC contract with SHAMAL AZ-ZOUR AL-OULAon December 12 to build the first phase of the Az-Zour North Independent Water and Power Project (IWPP), the company said in its press release.
HHI, as the EPC consortium lead, will carry out the construction of the gas-fired 1,500 MW combined cycle power plant. Sidem, as EPC consortium partner, will construct a 107 MIGD (486,000m3/day) desalination water plant on a turnkey basis. The capacity of Az-Zour North will account for around 10% of Kuwait’s installed power generation capacity and around 20% of its installed desalination capacity.
The consortium will complete the project approximately 100 km south of Kuwait City in the fourth quarter of 2016. Kuwait’s Ministry of Electricity and Water (MEW) will be the off-taker of power and water produced from the project under a 40?year long?term Energy Conversion and Water Purchase Agreement (ECWPA). The project is the first independent water and power project in Kuwait developed as part of long-term expansion plans of the power and water production capacity in Kuwait and a pathfinder scheme for Kuwait’s public-private partnership (PPP) programme.
As EPC partners, HHI and Sidem have been participating in the development process together with the consortium formed by GDF SUEZ, Sumitomo Corporation and Abudlah Hamad Al Sagar & Brothers, since March 2011. Competition among developers from Europe, Japan, Korea and the Middle East was tough. A positive evaluation of HHI by the Kuwaiti Ministry might have benefited the award as HHI handed over Kuwait’s previous Sabiya Combined Cycle Power Plant far earlier than the required schedule, which enabled MEW to meet the challenging electricity demand during the summer peak load period of 2011.
Mr. Chun In-soo, COO of HHI’s Industrial Plant & Engineering Division said, “HHI, GDF SUEZ, and Sidem have worked together on a wide range of projects in the Middle East. The synergy of our alliance will ensure this project is completed in time and on budget.”
Buoyed by continued high oil revenues and rapid growth of the economy and the population, it is expected that large water and power projects will be steadfastly developed in the Middle East. Thanks to the success in the first IWPP in Kuwait, HHI would be in good position in the successive bid of Az-Zour North IWPP phase 2.