MercoPress. South Atlantic News Agency

Argentina invests 1.6 billion in two power plants

Siemens Power Generation, a unit of Siemens AG (SI) said Friday it has been awarded major contracts from Argentina for the turnkey construction of two combined cycle power plants.

The Siemens-led consortium will build the power plants in Campana in the province of Buenos Aires and in Timbes near the city of Rosario in the province Santa Fe.

The total order is valued at 1.6 billion US dollars.

Siemens PG's share including the simultaneously signed long-term service agreement amounts to approximately one billion US dollars. Both projects are constructed and operated by the Independent Power Producers Termoelectrica Manuel Belgrano S.A., TMB and Termoeléctrica José de San Martín S.A. (TSM), whose main shareholders are Endesa SA (ELE), Total SA (TOT), AES Corp (AES), Petrobras Energia SA (PESA.BA), Electricite de France (1024251.FR) and Duke Energy Corp (DUK).

Over the past three years Argentina's economy has grown about 8% annually. These new orders for two fossil fueled power plants are part of the government's national energy plan from 2004 to prevent an energy shortage.

Presently, Argentina has an installed capacity of 24,000 MW. By the year 2015, experts expect an increase of the installed capacity to approximately 38,000 MW. Increasing the total installed capacity by 7%, Jose de San Martin and Manuel Belgrano will make a major contribution to meet the growing energy demand in Argentina.

For both projects, Siemens PG will deliver two high-efficiency gas turbines, one steam turbine and its most advanced instrumentation and control system. Furthermore, the Siemens scope of supply includes the heat recovery steam generator and power electrics. Siemens also will handle maintenance for the two power plants for a period of ten years.

The consortia partners Duro Felguera SA (MDF.MC) and Electroingenieria SA for TMB and Inelectra S.A.C.A. and Electroingenieria SA for TSM will be responsible for the balance of plant and construction of the plants.

Each of the new plants will have a capacity of 830 megawatts. The primary fuel will be natural gas, with liquid fuel as an alternative. Commercial operation is due to start in the first half of 2008 in open cycle mode and full operation in combined cycle mode is scheduled for one year later, in early 2009.