South Korean construction company DL E&C has signed a contract for designing and procuring equipment for a major gas and chemical plant in Russia. The contract, signed with the Russian Baltic Complex Project, is valued at 1.6 trillion won (US$1.33 billion). The builder won out against European firms to land the contract, in a sign of the growing links between Russia and Asia.
“This project is meaningful in that we won a big order in Russia, a market regarded as a high barrier to entry for Korean construction companies,” says Yoo Jae-ho, head of DL E&C’s plant business division. The company aims to strengthen its digital innovation and Building Information Modelling (BIM)-based design ability, to solidify its position in the expanding Russian market.
DL E&C has been involved in the basic project design of the Russian Baltic Complex Project at Ust-Luga on the Gulf of Finland, since December 2019. A basic design is a stage of drawing a rough sketch of a plant, laying the foundation for project design and quotation.
The company is now well-placed to participate in the main construction contracts. Its participation in the basic design will help in foreseeing difficulties that could arise at the main construction stage. This will also make it possible for the firm to manage overall project risks beforehand and complete the optimal detailed design that could maximize the efficiency and profitability of the project.
The plant will have capacity to process 45 billion cubic metres of natural gas into LNG and chemical products. It will be capable of producing 5 million tonnes of polyethylene, 120,000 tonnes of butane and 50,000 tonnes of hexane a year.
DL E&C says it is pursuing growth and profitability by escaping overcrowded markets to penetrate new markets aggressively. Its operating profit ratio for the third quarter of 2021 shot up to 14.3%, the highest in the industry.