DL E&C Wins 1.6 Trillion KRW Natural Gas Plant Contract in Russia

Location of Ust-Luga, Russia (Photo by DL E&C)

[Asia Economy Reporter Ryu Taemin] DL E&C has secured a mega gas chemical plant project worth 1.6 trillion KRW in Russia.

DL E&C announced on the 30th that it signed a contract for the Russia Baltic Complex project. The contract amount is approximately 1.6 trillion KRW (about 1.17 billion euros), and DL E&C will be responsible for design and equipment procurement.

This project involves constructing the world's largest single-line polymer plant in the Ust-Luga area, located 110 km southwest of Saint Petersburg. The plant will produce 3 million tons (t) of polyethylene, 120,000 t of butene, and 50,000 t of hexene annually.

Ust-Luga is one of Russia's major port cities located on the Gulf of Finland, where large-scale investments are currently underway. A gas chemical complex, the largest in Russia, is planned to be established here, processing 45 billion cubic meters of natural gas annually to produce LNG and chemical products.

Since December 2019, DL E&C has been in charge of the basic design for this project. Basic design is the stage of drawing the blueprint of the plant and setting the foundation for design and cost estimation. This field has been virtually monopolized by major European construction companies. Through the basic design, DL E&C gained recognition of its capabilities from the Russian project owner, leading to the successful contract award for this project.

DL E&C is focusing its capabilities to secure orders from basic design through to the main construction. Participating in the basic design allows for early identification of potential challenges expected in the main construction, enabling preemptive risk management throughout the project. Additionally, optimized detailed design maximizes efficiency and profitability, positioning DL E&C advantageously for securing the main construction contract.

Furthermore, DL E&C is currently performing the basic design for a mega methanol plant being constructed by Swiss global fertilizer company EuroChem in the Ust-Luga area, as well as for a polypropylene plant promoted by Russian oil company Lukoil. Having proven its EPC order competitiveness based on basic design through the Baltic project, DL E&C expects additional orders in the projects currently under basic design.

Yoo Jaeho, Head of DL E&C’s Plant Business Division, stated, “This project is highly significant as it represents a large-scale order won in the Russian market, which has long been considered a difficult barrier for Korean construction companies to overcome. We will further strengthen our design capabilities based on digital innovation and Building Information Modeling (BIM) to firmly establish differentiated competitiveness in the Russian market, which is expected to expand in the future.”

This content was produced with the assistance of AI translation services.