Phu My 3: a model BOT

The Phu My 3 project, Vietnam’s first build-operate-transfer power plant, has been officially inaugurated. The 720 MW power plant accounts for around ten per cent of the country’s electricity supply, and achieved commercial operation after just 26 months of construction.

Siàƒ¢n Green, Managing Editor

In December 2001, Siemens Power Generation broke ground at the site of the Phu My 3 power project in Vietnam. Just 26 months later, in early 2004, the plant completed commissioning and achieved commercial operation.

Developed as a build-operate-transfer (BOT) project, Phu My 3 has become one of Vietnam’s most important power projects, and a model for power project development across Asia. The 720 MW baseload power plant supplies around ten per cent of Vietnam’s electricity needs and is the largest private combined cycle plant in the country.

Phu My 3 is located at the Phu My industrial complex, 70 km southeast of Ho Chi Minh City in the Tan Thanh district of Ba Ria-Vung Tau province, Vietnam. Constructed by Siemens under a turnkey contract, Phu My 3 was officially inaugurated in April 2004 and will be operated by the Phu My 3 BOT Power Company for a period of 20 years. It therefore plays a key role in the Vietnamese government’s plans to develop a clean and dependable power generation sector to support the country’s economy (see sidebar).

Figure 1. The Phu My 3 power plant in Vietnam was officially inaugurated in April 2004
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BOT first

The Phu My 3 BOT Power Company is an independent power producer (IPP) which in 1995 signed an agreement with the Vietnamese government to develop Phu My 3 as a natural gas fired combined cycle power plant. The project thus became the first power project in the country to be developed under the BOT model, and Phu My 3 BOT Power Company sought to secure key contracts for the project, including the power purchase agreement (PPA), gas supply agreement (GSA), and the engineering, procurement and construction (EPC) contract.

The Phu My 3 BOT Power Company is a consortium of BP, SembCorp Utilities of Singapore, Japan’s Kyushu Electric Power Co. and

Sojitz Corp. (formerly Nissho Iwai Corporation). BP and SembCorp both own one-third of the project company, while Kyushu and Sojitz share the remaining one-third.

Figure 2. The Phu My 3 power plant is equipped with two Siemens V94.3A gas turbines
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For BP, the successful completion of the Phu My 3 project is the culmination of a larger project to exploit and market Vietnam’s natural gas reserves. Together with ONGC and PetroVietnam, BP has developed part of the Nam Con Son gas field, which is situated some 370 km off the coast of Vietnam near the islands of Lan Tay and Lan Do. Natural gas from Field 6.1 is brought to shore via a sub-marine pipeline ” constructed by BP, Conoco and PetroVietnam ” where it is processed in an onshore gas purification plant. From there, the gas is transported via a 30 km pipeline to the Phu My industrial zone.

The $1.3 billion Nam Con Son project will deliver around 3 billion m3 per year of natural gas to Vietnam’s shore, helping to increase the country’s energy self-sufficiency. First gas from the field flowed in November 2002, and BP estimates that the gas delivered could be used to generate around 40 per cent of Vietnam’s existing electricity supply. Gas from Nam Con Son is sold directly to PetroVietnam, which markets and delivers the fuel to consumers at the Phu My industrial Zone.

Under a gas supply agreement signed in May 2001, PetroVietnam supplies 3.2 million m3/day of natural gas to the Phu My 3 power plant. The natural pressure of the gas field is still sufficient at present for the Phu My complex, but future plans provide for construction of a compressor station in the next seven to eight years to maintain the necessary pressure. An alternative fuel for this power plant is fuel oil and the power plant has been provided with sufficient storage capacity for six days’ operation at full load.

Other key contracts concluded by Phu My 3 BOT Power Company in May 2001 include the power purchase agreement (PPA), under which electricity from the plant will be sold to Electricity of Vietnam (EVN) for a period of 20 years. Under the BOT contract, signed between Phu My 3 BOT Power Company and Vietnam’s Ministry of Industry, Phu My 3 BOT Power will operate and maintain the plant for 20 years, after which the plant will be handed over to the Vietnamese government.

In addition to the equity by shareholders, the Phu My 3 BOT Power Company was financed largely by the Japan Bank for International Cooperation, the Asian Development Bank, MIGA (part of the World Bank Group) and international commercial lenders. In addition to these capital inflows, the project also had a number of other beneficial economic impacts, including the creation of thousands of jobs during construction and the establishment of partnerships with local suppliers and contractors.

Figure 3. Phu My 3 is located in the Phu My industrial zone, 70 km southeast of Ho Chi Minh City, Vietnam
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Feeding economic growth

Phu My 3 is one of several power plants located at the Phu My industrial zone. The site is the largest power generating facility in Vietnam and has been operational since the mid-1990s. When all power projects at the site are complete, the entire complex will deliver 3900 MW of power to the country’s grid.

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The Phu My complex encompasses the 1090 MW Phu My 1 combined cycle power plant and Phu My 2.1, which has a capacity of 860 MW. Phu My 2.1 originally consisted of just one 288 MW simple cycle gas turbine unit but has since been upgraded into a combined cycle plant through the addition of a 150 MW steam turbine. A second unit, named Phu My 2.1 Extension and built by Siemens PG, is rated at 274 MW and is equipped with two V94.2 gas turbines and two air-cooled generators. This unit is also being upgraded for combined cycle operation through the addition of a 150 MW steam turbine under a project scheduled for completion by 2005. Unit 2.1 Extension has been feeding into the Vietnamese grid since 1999.

Figure 4. Developed as a build-operate-transfer (BOT) project, Phu My 3 has become one of Vietnam’s most important power projects, and a model for power project development across Asia
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In addition to Phu My 3, two other combined cycle power plants ” the 450 MW Phu My 4 and the 715 MW Phu My 2.2 ” are under construction. Phu My 2.2 is also a BOT project and is being developed by Mekong Energy Co., a consortium founded by French utility EDF International, Sumitomo Corporation and Tokyo Electric Power Company International. The plant is due for completion by September 2004.

Constructing Phu My 3

In 1999, Vietnam’s Ministry of Industry approved Phu My 3 BOT Power’s selection of Siemens as the main EPC contractor for the project and the EPC contract was finalized and signed in May 2001. In June 2001, site clearance and preparation started and on 31 December 2001, one month after the ground breaking ceremony, Siemens’ site works started.

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Under the terms of the EPC contract, Siemens was appointed general contractor and was responsible for detailed design, procurement, construction, erection and commissioning. The Siemens scope of supply included two gas turbines, one steam turbine, three generators, the entire electrical equipment and the instrumentation and control (I&C) system. The total order was worth g300 million. The company also signed a 12-year maintenance agreement covering the gas turbine island.

Figure 5. A flow schematic of Phu My 3. The plant consists of two Siemens V94.3A gas turbines, two heat recovery steam generators (HRSGs) and a 270 MW steam turbine
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Work carried out by local subcontractors included the firefighting system, the water and fuel oil tanks, the civil construction and the mechanical and electrical erection.

Phu My 3 is a multi-shaft combined cycle plant based around Siemens’ reference plant concept. The plant consists of two Siemens V94.3A gas turbines which exhaust to two downstream heat recovery steam generators (HRSGs), which were supplied by Doosan of South Korea. The HRSGs raise steam for a single, 270 MW steam turbine.

“This is very close to our standardized power plant concept,” noted Hermann Dieter, Siemens Power Generation project director. “It differs from the standardized design in very minor areas where the needs of the customer and the site are taken into account. Auxiliaries such as the oil tanks, control room, cooling water pumps and so on have been specifically tailored.”

The Phu My 3 power plant is designed for a net output of 716.8 MW. Its main fuel is natural gas and liquid fuel is used as a standby. When firing fuel oil, water will be emulsified to the fuel before combustion in order to ensure low nitrous oxide (NOx) emissions.

Power train

Phu My 3 is equipped with two V94.3A gas turbines which are 50 Hz machines rated at 266 MW. The units consist of a 15-stage axial-flow compressor with controlled diffusion airfoils and a four-stage turbine section. The turbine blades are partly single crystals with a thermal barrier coating and film cooling. The annular combustion chamber is equipped with 24 hybrid burners to minimize NOx emissions. The turbines operate at 3000 r/min.

The annular combustion chamber of the V94.3A consists of three casing sections forming an inner cone and two outer half shells. The metallic walls of the combustor are protected against high temperature exhaust gas in the same way as the proven silo combustion chambers of the V94.2 gas turbine: by ceramic tiles.

Each gas turbine exhausts to a horizontal gas path, natural circulation HRSG. The HRSGs are unfired and consist of three pressure levels plus a reheat section. Exhaust gas from the turbines is expanded horizontally through the high pressure (115.45 bar/550.9à‚°C), intermediate pressure (30.9 bar/322.8à‚°C) and low pressure (4.73 bar/237.3à‚°C) sections of the boilers before being released to the stack. Reheat steam conditions of the HRSGs are 29.5 bar/550.2à‚°C.

Figure 6. Project interface diagram: key contractual arrangements and interfaces
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Because the boilers are unfired, they are able to react quickly to load changes and are also capable of fast start-up.

Steam raised in the HRSGs feeds a single Siemens steam turbine, which is a KN model. The steam turbine has three cylinders: a high pressure (HP) cylinder for 115 bar and 550à‚°C, an intermediate pressure (IP) cylinder for 30 bar and 355à‚°C, and a low pressure (LP) cylinder for 4 bar and 235à‚°C. The steam turbine has a split casing, with one section housing the high and medium pressure turbines and the other housing the LP turbine. The LP section has a double flow steam direction.

The steam is finally delivered in an axial direction to a river (brackish) water-cooled condenser. This condenser is in two sections so that operation can continue on a limited basis if one condenser section is not available.

All three turbine-generators are housed together in a common turbine building. The two gas turbines are equipped with Siemens THRI hydrogen-cooled generators rated at 279 MVA and 15.75 kV. The steam turbine-generator is an air-cooled Siemens TLRI unit rated at 293 MVA and 15.75 kV.

The plant is connected to the EVN grid via a 220 kV transformer. Later this year, this connection will be upgraded with a 500 kV transformer.

The entire power plant is operated from a central control room equipped with a Siemens Teleperm XP control system.

Project milestones

Commissioning of the Phu My 3 power plant began in June 2003. August 2003 was a milestone for the plant, when first gas was received on site and first firing of the gas turbines took place, along with first synchronization of the gas turbines to the national grid. By the end of 2003, Siemens had completed steam blows, synchronized the steam turbine to the grid and carried out the combined cycle load test. In January and February 2004, performance tests and the reliability run were completed. Commercial operation started on March 1, 2004.

A dedicated team

At the peak of construction, in March-April 2003, over 1800 personnel were active on site. Now, some 63 personnel are employed to operate and maintain the plant. The construction workforce was highly efficient, says Dieter, and the quality of the work carried out was high. As a result, actual implementation of the project largely went ahead according to schedule. It took just 16 months to complete all foundation and building work. The remaining milestones ” delivery of the gas and steam turbines, installation on their foundations, synchronization of the gas and steam turbine-generators and trial operation ” were also completed on schedule. Piping installation and installation of the HRSGs were completed in July 2003.

High standards in health and safety was also a requirement of Siemens’ client, and so the company set up a 20-strong dedicated on-site health and safety team to work with employees and subcontractors to implement and oversee a health and safety policy.

Although implementing high quality health and safety practices at the site was a major challenge, the results of the programme are impressive: by the beginning of 2004 when commissioning had reached a peak, 6 590 767 man-hours of work had been carried out at the site. However, only 24 First Aid Treatments had been carried out, and just eight Lost Time Accidents (defined as an accident that requires the injured person to take more than three days off work) had been recorded.

Vietnam’s electricity sector

With a population of around 80 million and an annual economic growth rate exceeding six per cent, Vietnam has plans for the rapid expansion of its energy and electricity sectors. The country has a diverse range of primary energy resources, but its reserves are neither fully proven nor extensively developed.

Moreover, more than 20 million of its rural population have no access to electricity. In 2002, the country’s installed generating capacity stood at 8817 MW, while electricity demand grew by 16 per cent.

Vietnam relies on hydropower for 48 per cent of its electricity generation, with gas turbines accounting for 26 per cent and coal fired power plants 14 per cent. Diesel generators and oil fired plants contributed only a very minor share (three and two per cent respectively). Still in the very early stages of development are contributions from independent power producers (IPPs), which made up the remaining seven per cent in 2002.

To meet the rapid growth in electricity demand and to underpin the country’s modernization and industrialization plans, EVN has devised a Master Plan for Energy Development for the period 2001-2010. Under this plan, 6432 MW of new capacity will be added in the period to 2005, and a similar amount between 2006 and 2010. Given Vietnam’s large hydropower potential, half of this new capacity will be hydropower. However, plans also exist for the development of new coal and natural gas fired power targeting 90 per cent coverage by 2010.plants. EVN also has plans for the creation of a national power grid by 2020, and its rural electrification programme is targeting 90 per cent coverage by 2010.

These plans will require investments of around $19.5 billion ” $13.37 billion for the generation sector and $6.23 billion for transmission and distribution. While some of this funding can be generated domestically, the country will have to call on international and commercial financial resources in order to ensure that the plans are implemented. To facilitate this, the government may be required to provide credit enhancement guarantees.

The emerging financing gap has opened the door to new opportunities for the development of IPP projects such as Phu My 3.

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