Daewoo Engineering and Constru-ction Co. won a project to build oil pipeline and storage facilities in Venezuela, part of a $1 billion project connected to the PDVSA Co.’s oil export facilities construction project, the company said on Sept. 9. PDVSA is a state-owned oil company in Venezuela.

The FEED Project or Front-end Engineering Design involves laying an oil pipeline for 1,500 km in the Junin-Carabobo-Araya areas in Orinoco State and building oil storage facilities and wharfs, three packages in total, with a basic design cost of 73.8 billion won. 

Daewoo Construction, with its 50:50 consortium partner STX Construction, has been engaged in various efforts to win the project since April and will supervise the entire FEED project for 12 months.

But the market is skeptical on the formation of a consortium with STX Construction, currently under court management, along with STX Heavy, which has been taking over from STX Construction on the Venezuelan project, and it is doubtful whether it can make use of STX Construction’s technologies. POSCO Construction and POSCO Engineering are being mentioned as potential candidates to take over from STX, industry sources said.

Other sources said Daewoo Construction needs a close relationship with a plant engineering firm, opening the way for the formation of a new consortium with the likes of POSCO Engineering or other plant engineering firms both at home and abroad.

Daewoo Construction officials said all the options are on the table, and changes in the STX consortium, the participation of a third party, and a tie-up with a medium-sized plant engineering firm are being discussed and the results are soon to be made public.

Daewoo Engineering and Construction Co. set 8.16 trillion won as this year’s target for securing construction projects both at home and overseas, with the goal of 51 percent from overseas. The company won the Safi Independent Power Project, the biggest project in Morocco involving the construction of a coal-burning thermal power plant and supplementary facilities for 1.971 trillion won on Aug. 9. The project, the biggest so far won by the company overseas, is an EPC-type, which means the builder will take charge of all phases of the projects from design to purchase and construction, the company said on Aug. 12.

The privately-invested thermal power plant will be built on a seaside location some 15km south of Safi with the power generation capacity of 1,320Mw. Daewoo Construction signed the contract with Safi Energy Co. to complete the project in 46 months.

Under the leadership of Park Yong-sik, the new president, the company has managed to tie down 2.23 trillion won in overseas projects, far below the target, but is optimistic that it will have no problems meeting its target because many projects the company has been working to secure are to be ordered in the second half.

Daewoo Construction kicked off its overseas operations in 1976 with a road construction project in Ecuador when the company was part of the now-defunct Daewoo Group. Since then, the company has operated in 44 countries on 410 projects valued at $45.4 billion. The company has been ranked among the top 50 construction firms in the world steadily over the years, according to the ENR, a construction industry publication in the United States.

The company has diversified its construction projects from oil and gas plants to intelligent buildings, hotels (Malaysia, Singapore), container terminals, shipyards (Algeria, Oman, and Qatar), and apartment complexes (Saudi Arabia, Libya). An outstanding example of its diversification is the project in Algeria for the recovery of a stream in downtown Algiers, the capital of the north African country, from pollution with the waste and waste water from factories, earning it the nickname the “Dead River.” Daewoo has to clean the river and make the riverbanks a resting place with facilities for arts and culture for residents of Algiers.