Middle East Energy

Racing against the clock

HPI of Houston, USA pulled off a major coup in edging out much larger companies to win a $270 million contract for a 200 MW power plant in Kuwait by pledging a six-month timeframe from breaking ground to commissioning.

International project developer HPI is celebrating the wrapping up of a power plant project in Kuwait and getting a jump on feeding Kuwait’s rising hunger for electric power. The Shuwaikh power plant facility, also known as the Emergency Peaking Power Shuwaikh (EPPS), began a phased startup on 31 May.

The EPPS plant will produce 200 MW of low-emission power, making it the largest aeroderivative engine power plant of its kind in the Middle East. The most striking feature of this project was the lightening quick six-month timeframe from breaking ground to plant commissioning.

Panoramic view of the plant site with six LM6000 gas turbine generators inplace only 45 days from notice to proceed
Click here to enlarge image

This was accomplished by HPI forming a well-tooled consortium that hit the ground running in January, as soon as the contract was signed with the Kuwaiti Ministry of Energy (MOE). This fast-track Engineering, Procurement and Construction (EPC) effort included HPI’s engineering partner, S&W Energy Solutions Inc. (SWES) and Alghanim International (AI), a large Kuwaiti civil and electromechanical contractor.

Getting the project under way last December in such a rapid fashion was possible due to the strong foundation each firm had established prior to the commencement of negotiations. Each company had built firm relationships globally and had earned a sterling working reputation in the Middle East and other regions over the years prior to the contract award.

The immediate impact of all of this was the ability of the consortium to begin project planning immediately. Little time was lost sorting through the myriad technical, logistical, financial and political details needed to produce a strong commercial technical proposal to the Kuwaiti MOE.

HPI’s president Hal Pontez’s relationship with Houston-based SWES and with his EPC experience prior to founding Houston-based HPI, along with both companies’ experience with power systems paved the way for HPI to find the right people and the right companies to piece the project together.

Also, HPI and SWES are each located in Houston, which eased communications and logistics for both companies. Their proximity to each other as well as several key suppliers proved invaluable.

“Having two of the firms based in Houston was a huge advantage when we agreed to the project’s tight timeline,” said Hal Pontez. “When the MOE personnel arrived to inspect their top seven capital line items, they did not have to travel more than 80 km from Houston’s George Bush Intercontinental Airport. Everything was right here and that facilitated the acceptance of the equipment.”

Complementary skillsets

The HPI-SWES-AI team combined HPI’s project management and supervisory systems experience, SWES’s experienced installation personnel for the gas turbine generators, and AI’s ability to direct the heavy construction equipment, workers, haulage and site logistics. These complementary skillsets and experience enabled work to immediately begin at the construction site as well as HPI’s and SWES’s facilities in Houston. Another advantage to the consortium’s ability to work closely together was each firm knowing their respective roles. Proper planning meant little time was wasted figuring out what each successive project milestone required.

“We broke ground first because we had everything lined up as soon as the contract was signed,” said Thaddeus Berry, bid estimator for HPI. “The equipment and personnel were located at their respective sites and everyone understood the plan.”

Artist’s rendering of the main plant components at completion, including gas turbine generators with integrated air inlet chillers, additional standalone chilling capacity, step-up transformers and fuel gas compressors
Click here to enlarge image

With well-developed and proven industry relationships, HPI and SWES were able to procure six LM-6000 engines from GE for the project. The new engines, and their associated equipment, were shipped via a Kuwait bound freighter within three weeks of receipt of the contract from Houston.

There were several firms bidding for the Kuwiati MOE’s contracts. The Kuwaitis were looking to increase their installed base by 1000 MW by the summer of 2007.

Clearing the hurdles

Even with a strong consortium and a deep understanding of how to compete against international firms and other industry players, there were several hurdles to clear before winning this contract.

First, the consortium was able to prove that it had a plant design ready to go that would pass a stringent technical review. Second, it also proved that within the consortium it had the engineering skills, the equipment - including the turbine-generators - and the manpower to meet the timeline. Third, the consortium had the financing available as well; these factors, added to the reputation of all three companies, passed the Kuwaiti government’s commercial and technical requirements.

Construction in full-swing, with foundation for the MCC building being prepared
Click here to enlarge image

The pre-project planning included finalizing a design for the plant before the contract date and project teams understanding where and when to build. Also, the technical capability to install systems to increase the efficiency of the turbines in the high temperatures of the Kuwaiti summer was part of the evaluation. The air intake chilling systems installed with each gas turbogenerator passed a rigorous review.

The HPI-SWES-AI consortium passed the stringent review process. The fact that the companies did indeed possess the equipment, technical capability, required project experience and financial backing, the contract was awarded right at the beginning of 2007. Another factor in the awarding of the contract was the consortium prior experience in Kuwait ensured that they understood the terms and conditions of the Kuwaiti MOE for this project.

“The key factor that enables us to execute all of this in six months is due to our ability to conduct concurrent engineering and construction,” Berry added.

While the engines were being shipped, AI personnel were preparing the site at Shuwaikh with its crews. The site had to be cleared of rubble amassed since the early 1990s before any construction work could begin. SWES and the HPI site manager were in place for pre-construction activities and logistics coordination. Together all three companies ensured that the piping, wiring, foundations and other concerns were prepared so that the engines could be installed immediately upon arrival. All the turbogenerators were installed as scheduled due to the excellent work of the site crews.

Meanwhile, HPI designed and engineered the supervisory control system (SCS) so that it will be operational when the site is complete. The installation and commissioning of the major plant equipment and this plant SCS was accomplished concurrently with the staffs of HPI and SWES.

Finally, AI will ensure that the physical tie into the electrical grid is complete and the site cleanup is conducted properly. The new control facility is nearing completion and the startup and commissioning of the engines is on schedule.

“We are able to accomplish this construction because all the partners utilize their strengths and work effectively together, round the clock,” Berry said.

Meeting the urgent need for power

Awarded by the Kuwait’s MOE, the $270 million contract includes a five-year operations and maintenance contact, a programme for which HPI and SWES have already staffed with the appropriate personnel. The plant is being built to assure a supply of electrical power to Kuwait City during the peak power usage months.

With air conditioning drawing the most on demand for electricity and with electric prices highly subsidized, demand continues to drive upward. Kuwait’s craving for electric power surged last summer when rolling blackouts and brownouts forced the Kuwait government to consider building up their installed base of peak power plants. The answer was inking four contract deals last December to build approximately 1000 MW of electrical power. The HPI consortium will be the first to complete their contracted project.

“Kuwait is undergoing a tremendous explosion of commercial growth and we are able to ensure any future power needs will be met,” said Pontez. “We are pleased with the opportunity to help provide a solution to the Kuwaiti government and the citizens of Kuwait.”

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