Sumitomo Corporation awarded construction of 400MW Zerger (Lebap) Gas-Fired Power Plant

Sumitomo Corporation has signed an engineering, procurement and construction (EPC) contract for the 400 MW Zerger (Lebap) Gas-Fired Power Plant in Turkmenistan.

The contract between Sumitomo Corporation and Turkmen State Power Corporation, Turkmenenergo, includes civil and installation works for construction of the project.

The power plant is a new simple cycle gas-fired power plant to be located approximately 600 kilometers northeast of Ashgabat, the capital of Turkmenistan, a rapidly developing country in Central Asia.

Sumitomo Corporation takes a role of a prime contractor, being responsible for all aspects, including procurement of the main equipment—the gas turbine and power generator—from Mitsubishi Hitachi Power Systems. This will be the first contract for construction of a large-scale power plant for which Japanese company receives an order in Turkmenistan.

The EPC contract amount is approximately US$300 million. The construction is scheduled to commence by the end of fiscal 2015 (ending March 31st, 2016) and is planned to complete in 2018. Funds for this project are to be raised from a syndicate of Japanese banks and insurance is to be provided by Nippon Export and Investment Insurance (NEXI).

With the fourth largest natural gas reserves in the world, Turkmenistan in recent years has been promoting downstream energy projects to facilitate the diverse use of its abundant gas resources as well as aggressively building relationships with neighboring countries through the development of infrastructures, including railways, pipelines and electricity.

In September 2015, the Turkmen government concluded a power purchase agreement (PPA) with the Afghan government to export low-cost gas-powered electricity to the country for 10 years from 2018. The Power Plant will be the main source of the electric power to be exported to Afghanistan under the PPA with the aim of supporting the reconstruction of Afghanistan.