Oct. 26, 2015
Contract Awarded for Construction of 400MW Zerger (Lebap) Gas-Fired Power Plant in Turkmenistan
Sumitomo Corporation (Head Office: Chuo-ku, Tokyo; President and CEO: Kuniharu Nakamura) has signed an EPC*1 contract, including civil and installation works for construction of Zerger (Lebap) Gas-Fired Power Plant (Lebap Province, Turkmenistan; power capacity: 400 megawatts; hereinafter, “the Power Plant”) with Turkmen State Power Corporation “Turkmenenergo”.
The Power Plant is a new simple cycle gas-fired power plant to be located approximately 600 kilometers northeast of Ashgabat, the capital of Turkmenistan, a rapidly developing country in Central Asia.
Sumitomo Corporation takes a role of a prime contractor, being responsible for all aspects, including procurement of the main equipment—the gas turbine and power generator—from Mitsubishi Hitachi Power Systems, Ltd. This will be the first contract for construction of a large-scale power plant for which Japanese company receives an order in Turkmenistan. The EPC contract amount is approximately US$300 million. The construction is scheduled to commence by the end of fiscal 2015(ending March 31st, 2016) and is planned to complete in 2018. Funds for this project are to be raised from a syndicate of Japanese banks and insurance is to be provided by Nippon Export and Investment Insurance (NEXI).
With the fourth largest natural gas reserves in the world, Turkmenistan in recent years has been promoting downstream energy projects to facilitate the diverse use of its abundant gas resources as well as aggressively building relationships with neighboring countries through the development of infrastructures, including railways, pipelines and electricity. In September 2015, the Turkmen government concluded a power purchase agreement (PPA) with the Afghan government to export low-cost gas-powered electricity to the country for 10 years from 2018. The Power Plant will be the main source of the electric power to be exported to Afghanistan under the PPA with the aim of supporting the reconstruction of Afghanistan. Moreover, this construction project will, as a symbol of the “Partnership for Quality Infrastructure” promoted by the Japanese government, play a role in basic infrastructure development in the two countries using funds, insurance and technology of Japan.
As part of its initiatives in the electricity markets in emerging countries, Sumitomo Corporation is focusing on Central Asia and will take advantage of this project to further develop the region’s electricity market. The total capacity of power plants built in overseas projects where Sumitomo Corporation has been involved has already exceeded 50 GW. Based on the long track record and a great deal of experience, Sumitomo Corporation will further expand its power infrastructure businesses on a global scale and contribute to economic development around the world through infrastructure improvement.
*1 EPC: Engineering, Procurement and Construction
- Plant location