Koreans make project debut in Europe at LNG-chemical plant

Tuesday, 11 January 2022
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DL E&C will provide the design and equipment procurement for ethane at RusGazDobycha complex

LNG News Editor: 

A South Korean company has won a contract for a mega-scale gas and chemical plant in Russia, defeating European competitors for the building of the biggest complex of its kind with capacity to turn 45 billion cubic metres of natural gas into LNG and chemical products.

DL E&C will provide design and equipment procurement services for the ethane-cracking complex portion of the Gazprom-RusGazDobycha complex for processing ethane-containing gas at the Russian facility.


Gazprom-RusGazDobycha are combining gas processing, liquefaction, and chemical complex for processing ethane-containing gas (CPECG) at the plant.

The complex includes a large-scale LNG plant which, with its capacity of 13 million tonnes of LNG per year and is designed to be the biggest such plant in northwest Europe.

Royal Dutch Shell had been a former partner in Baltic LNG, though formally pulled out of the venture in mid-2019 after Gazprom decided to switch part of the output for the chemical project.

A statement said the large investment was now under way to construct Russia’s largest gas and chemicals complex at Ust-Luga, a port city bordering the Gulf of Finland.

DL Engineering and Construction specializes in engineering, procurement and construction and said the heart of the venture was the world’s largest polymer plant on a single-line basis located 110 kilometres (68 miles) southwest of St. Petersburg.

The value of the contract is 1.6 trillion South Korean won ($1.32 billion) and DL E&C said it would take total charge of design and equipment procurement.

Founded in 1939, DL E&C was the first construction company founded in modern day Korea and is the parent company of the DL Group, which consists of 13 affiliates and is based in the capital Seoul.

“This project is meaningful in that we won a big order in Russia, a market regarded as a high barrier to entry for Korean construction companies,” declared Yoo Jae-ho, head of DL E&C’s plant business division.

When completed, the Russian plant will be capable of producing 3 million tons of polyethylene, 120,000 tons of butane and 50,000 tons of hexane a year.

“With its proven hard-to-beat competitiveness, DL E&C looks forward to winning new contracts in Russia,” stated the South Korean firm.

“It was the fruition of the company’s hard work to open up new overseas markets,” added DL E&C.

“DL E&C has given meaning to winning in the competition against advanced European construction firms to get involved in the largest plant construction project in Russia,” stated the Korean firm.

It explained that winning the contract in Russia now makes it a big player in the global petrochemical market and “proves its technological prowess” in the market.

“Now that it has hard-to-beat competitiveness, DL E&C looks forward to winning new contracts in Russia,” said the company.

DL E&C said it had been involved in the basic project design of the Russian Baltic Complex project since December 2019.

Managing risks

The Korean company said its participation in basic design would be of help in foreseeing difficulties that could arise from the main construction stage.

“This will make it possible to manage overall project risks beforehand and also to complete the optimal detailed design that could maximize the efficiency and profitability of the project,” said the Korean firm.

“DL E&C is paying attention to the potential of Russia as a way to diversify its market. It established a local firm in the country in 2015 to explore the market in earnest,” it added.

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