[Sponsored Report] SK E&C brings its vast project expertise to the global energy market

Guest Reports

Published: 21 Jun. 2018, 20:31

[Sponsored Report] SK E&C brings its vast project expertise to the global energy market

From left, Ryu Byung-sun, vice president of Seohee Construction, Joo Yang-gyu, vice president of SK E&C, Rodrigo Duterte, president of the Philippines and Alfonso G. Cusi, secretary of Philippine Energy, pose for a photo at a letter of intent ceremony for SK E&C’s 2.2 trillion won (＄1.9 billion) deal to build eco-friendly coal power plants in the Philippines. [SK E&C]

SK Engineering & Construction is emerging as a powerhouse in global development based on its many overseas orders. SK E&C has continued to shift its focus to more lucrative development projects, which provide higher income to the company than traditional engineering, procurement and construction (EPC) competitive bidding. It is planning to increase its focus on development projects and develop blue ocean markets through innovative business models and secure sustainable growth.

Development projects provide the necessary funding for large-scale infrastructure and development projects as well as performing and coordinating necessary elements throughout the project, such as related licensing and contracts.

The project is planned and reviewed by the construction company to commercialize quality projects. These projects are highly profitable, since companies can win construction projects using private contracts rather than more competitive bidding methods.

Since various companies and people are involved, including the organizations that ordered the project and investors, the experience and know-how to divide risk and mediate between different opinions are two of most important elements of success.

SK E&C has been fostering organizations and personnel for projects, including infrastructure, since early 2000. The companies’ ties to global financial companies have been reinforced for efficient and accurate financing.

SK E&C has achieved success with projects including the Turkey-Eurasia submarine tunnel and Laos’ Sapien-Senamnoi hydroelectric plant plan. SK E&C is known for its strength and EPC competitiveness and also its project financing and operation. The company is successfully managing projects with governments and global financial companies worldwide.

Currently, SK E&C is working on the most overseas development projects among local E&C companies. Last year, the company successfully won three big projects including Turkey’s Canakkale Project, the world’s longest suspension bridge. In addition, the company is making great achievements, promoting Kazakhstan’s infrastructure public-private partnerships and the Philippines’ coal thermal IPP (independent power producer).

Joo Yang-gyu, left, the vice president of SK E&C, and Alfonso G. Cusi, the secretary of Philippine Energy, shake hands at the ceremony. [SK E&C]

“We have been preparing and investing in development projects, which take a long time to see results from, and they will soon come to fruition. We will find markets not only in Asia, but also in the United States and Europe, for the sustainable development of SK E&C,” said Cho Ki-haeng, the CEO of SK E&C.

On June 15, SK E&C signed a letter of intent with the Philippines to construct an eco-friendly coal thermal power plant worth about 2.2 trillion won (＄1.9 billion).

On June 5, a business forum with Philippine President Rodrigo Duterte was held, and SK E&C suggested building two giant 600 megawatt thermal power plants in Luzon Island, northern Philippines.

This power plant can decrease the usage of coal by increasing its generating efficiency by 15 percent using its new Ultra Super Critical technology. Emissions of sulfur dioxide, nitrogen oxide and dust will be reduced to less than half of environmental effect assessment standards, making it an eco-friendly power plant which minimizes green-house gas emissions. If the Ultra Super Critical technology is used for the first time by an overseas business in the Philippines, it will be given Pioneer Status by the Government of Singapore Investment Corporation and receive an income tax holiday for a maximum of 6 years.

At the same time, sulfur dioxide, nitrogen oxide and dust emissions will also be cut by half of environmental impact assessment standards, making it an eco-friendly power plant that minimizes greenhouse gas emissions.

The Philippines is having trouble industrializing due to its high electricity fees, which are the second-highest in Asia after Japan. The project will help relieve the power shortage and will also produce more than 3,000 jobs during the construction period.

It is significant that local organizations, including the Korea Development Bank (KDB) and the KDB Infra Fund are planning to participate.

“If the infrastructure expansion policy, which is the core of the Philippines’ Dutertenomics, is pushed forward, there will be new opportunities for new private investment in not only plants but also infrastructure areas,” said an official at SK E&C.

BY KIM MIN-JI [kim.minji4@joongang.co.kr]