Sojitz Corporation


Order for LNG Receiving Terminal Construction Project Awarded by Spanish Power Company

Mar. 13, 2003

TOKYO(March 13, 2003)--With the cooperation of the Nissho Iwai Corporation, a consortium of five companies, led by Spain's largest construction company ACS (located in Madrid), TOYO KANETSU K.K. and Osaka Gas Engineering Co., Ltd. (Hokko, Konohana-ku, Osaka; President: Suzuo Dan), has been awarded a 'turnkey contract for the Sagunto LNG Receiving Terminal Construction' by local power companies including Union Fenosa (located in Madrid). The order amount to the consortium is approximately 31 billion yen, which will be the largest-ever for LNG receiving terminals in Spain.

From the viewpoint of environmental measures, the transition from coal-fired to gas-fired power generation, using gases such as LNG, is advancing in Europe, and has resulted in an increase in the demand for gases. On the other hand, gas supply to Europe used to be mainly through pipelines in Algeria and Russia. In order to meet the increasing demand for gases and to diversify the sources of supply, LNG supply is increasing, and LNG receiving terminal projects centralized in Spain and Italy are being promoted. 

The Sagunto LNG Receiving Terminal is to be constructed in Sagunto-city, about 50km north of Valencia State, and will have a receiving capacity of approximately 3 million ton/year. The Sagunto LNG Receiving Terminal Project is a collaborative effort by three power companies including Union Fenosa, the third-largest power company in Spain. LNG will be supplied to this terminal by the SEGAS LNG plant, which is currently under construction by Union Fenosa in Damietta, Egypt.

Nissho Iwai has ample experience in LNG receiving terminal projects, at home and abroad - from the development stage to materials and equipment procurement. Because such experience is highly evaluated, the company will play a role in procuring the necessary materials and equipment. The company will undertake LNG chain operations, from production to receipt of LNG, which is receiving worldwide attention as a clean fuel, and in future intends to develop such operations on a global basis.

TOYO KANETSU is the world's second largest tank builder, and has gained experience from installing over 4,500 various tanks both inside and outside Japan. In addition, Osaka Gas Engineering undertakes construction, operation and servicing of LNG receiving and satellite terminals owned by its parent company Osaka Gas Co., Ltd. Utilizing the know-how accumulated through carrying out such operations, the company is widely involved in terminal constructions by other domestic gas service providers and those abroad. Osaka Gas Engineering's participation in the project is a result of such highly-evaluated experience, and the company will conduct various administrative/supervisory operations in regard to design, construction and trial runs.

ACS has no credentials in the field of LNG receiving terminals. In order to compensate for such shortcomings, experienced Japanese companies will participate in the project.

With this order receipt as an opportunity, Nissho Iwai plans to aggressively expand its participation in new LNG receiving terminal projects that will be promoted centralized in Spain and Italy, as well as working on the construction work for the terminal, which is scheduled for operation commencement in 2006.

In addition, Nissho Iwai group will keep focusing on international "LNG Chain " projects, which include Upstream Development, Liquefaction, Transportation, Receiving Terminal, Power Plants and so on.

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