Koreans win $1.14b UAE refinery order

Hong Kong: GS Engineering & Construction, South Korea's third-largest builder, received a $1.14 billion order from Abu Dhabi Oil Refining Co. to build a refinery in the UAE, its biggest deal in more than five months.

Construction will take 42 months, the Seoul-based company said in a regulatory filing yesterday. The contract is the builder's first in the Middle East country, it added.

The UAE, Kuwait and other Gulf states have increased spending on refineries, power plants and floating platforms as oil trading near $100 a barrel boosts investments.

This demand may help GS Engineering, Hyundai Heavy Industries and other South Korean construction companies and shipbuilders book a third year of record orders. South Korea's construction companies and shipyards will probably win orders totalling as much as $50 billion this year, the Ministry of Commerce, Industry and Energy said on January 9.

About $42.2 billion worth of orders were received last year, 66 per cent more than the $25.4 billion in 2006, it said.

GS Engineering forecasts contracts at home and abroad to increase 15 per cent to 12.2 trillion won ($13 billion) this year. The company got a $1.8 billion order in August to build a crude-processing complex for Egyptian Refining.

GS Engineering dropped 0.4 per cent to close at 132,500 won in Seoul. The stock has advanced 56 per cent in the past 12 months, outpacing a 16 per cent climb in South Korea's Kospi index.

In the pipe line: Green diesel project

The UAE refinery, a green diesel project, will be built in the Ruwais Industrial Complex, 250 kilometres (155 miles) west of Abu Dhabi city, GS Engineering said.

The refinery will have a hydrocracker unit, capable of processing 41,000 barrels of diesel a day, a gas-oil hydrotreating unit, capable of processing 44,000 barrels daily, and other facilities, it said.