Engineering and construction contractor United Group has won a $190 million contract with state electricity generator Verve Energy for the ugrade of its Kwinana power station.
United today said it would undertake all engineering, procurement and construction services for Verve's $260 million high efficiency gas turbine project at Kwinana. The project will see two new high efficiency gas turbines with a combined capacity of 200 megawatts installed at Kwinana in time for the 2012 summer.
United managing director Richard Leupen said the Verve contract consolidated the company as major EPC contractor for open cycle gas turbines, which follow its 2008 contract with New Zealand's Contact Energy for the Stratford Peaker Project.
"This is a significant win for UGL and a strong vote of confidence in our Power Generation business. We look forward to partnering with Verve Energy on this important project and helping them to strengthen their market position," Mr Leupen said.
"UGL's Infrastructure business continues to trade well with a significant pipeline of tendering opportunities in the power, water, and transport sectors," Mr. Leupen said.
Verve's Kwinana power station currently has a total capacity of 660MW from four coal-oil fired units and a single 20 MW gas turbine. The upgrade will both improve Kwinana's efficiency and environmental performance, with plant's oldest coal-fired unit, Kwinana A, due for retirement in 2011 followed by the Kwinana C coal-fired unit in 2015.
Verve is also in the process of a $100 million refurbishment of WA's oldest and least efficient coal-fired power plant, the Muja A/B station near Collie, in joint venture with Geelong based Inalco Energy.
Though originally retired in early 2007, Verve is retrofitting new pollution control equipment to improve the 40 year old plant's environmental performance and provide 240 MW of additional peaking capacity from 2012. Verve intends to operate the plant for at least 15 years.
The proposal this week controversially escaped formal assessment by the Environmental Protection Authority, which ruled it could proceed subject to standard works approvals.
