The construction of liquefied natural gas plants presents a huge investment opportunity for energy companies in Europe, the Middle East, North Africa and Latin America.

The cheapening of technologies and equipment for liquefying natural gas and transporting LNG makes this type of fuel more and more attractive to consumers around the world.

LNG demand and production are expected to rise in the coming years, which will contribute to significant savings in many sectors and an acceleration of the global economy.

Morgan Stanley research shows that massive investments in new terminals, ships and liquefied natural gas plants will soon pay off. According to the agency’s estimates, the new capacity will lead to global growth of this market by 50% by 2025.

CP Finance UK Finance offers financing and construction of liquefied natural gas plants under an EPC contract.

For over 20 years our specialists have been offering financial and innovative solutions in the energy sector for private companies and government customers.

In this article, you will learn more about the prospects for investments in LNG plants, new technologies for the production of liquefied natural gas and our opportunities.

Liquefied natural gas plants: new investment opportunities

Liquefied natural gas is a non-corrosive, odorless cryogenic liquid made up of 90% methane.

Liquefied natural gas is a revolutionary fuel that could spur global economic growth over the next decade. It is becoming a more affordable fuel thanks to the development of technologies and the groeth of an extensive infrastructure for the production, transportation and regasification of LNG.

The LNG industry value chain consists of four links:

• Extraction of natural gas.
• Purification and liquefaction.
• Transportation.
• Regasification.

upon extraction, natural gas is transported via pipelines to liquefied natural gas plants, where it undergoes preliminary treatment.

This treatment removes all liquids and other components that may freeze (propane, butane, ethane, carbon dioxide and water). Then the gas is converted into a liquid state by deep cooling at atmospheric pressure, during which the volume is reduced by 600 times.

The resulting product is loaded onto LNG carriers, which are equipped with refrigeration and insulation systems to store and maintain the liquid state of the gas until it reaches the port of destination (LNG terminal).

The gas that evaporates during transportation is used as fuel.

In an LNG terminal, liquefied gas is vaporized during the heating process. The terminals have storage tanks that provide a continuous flow of gas into pipelines and cover peaks in demand.

Finally, after pressure regulation, natural gas is pumped into the main gas pipeline and sold to distributors or directly to power plants and large industrial consumers.

In some cases, liquefied is supplied to consumers by specially equipped tank trucks.

The importance of LNG for the global economy

In recent years, hydraulic fracturing has revolutionized the US energy sector, making the country the largest exporter of energy for the first time.

However, until recently, the role of liquefied natural gas plants in the global economy was small due to the technical difficulties associated with transporting and storing this flammable gas.

Experts predict that cheap LNG exports in the coming years will reduce energy prices in Europe and Asia, thereby stimulating the energy sector and commodity markets.

In the late 1990s, concerns about oil shortages arose in developed countries. The emergence of hydraulic fracturing technology, which is used to release gas and oil under high pressure, has radically changed the situation in the energy market.

Natural gas prices have declined 80% since the mid-2000s, largely driven by exponential growth in shale gas production in North America.

Thanks to the boom in shale gas, coal consumption has fallen in half and CO2 emissions have fallen by 25%.

This is despite the fact that in those years it was very difficult to transport and store natural gas, and the main share of gas exports fell on expensive gas pipeline systems.

The situation changed with the advent of LNG: natural gas became liquid and it is now very easy to transport it by tanker trucks or ships. For this reason, experts are talking about big changes in the energy market, opening up investment opportunities for the next few years.

Economic implications of increased LNG production

Building new liquefied natural gas plants could forever change the gas market and the energy companies that make money from it.

The LNG industry will affect the following companies:

• Engineering companies (EPC contractors).
• Transport companies (including ship owners).
• LNG equipment manufacturers.
• European chemical manufacturers.
• Other gas consumers.

Engineering and construction companies will clearly benefit from the introduction of the new fuel, as multibillion-dollar LNG production, transportation and regasification projects are under way around the world.

Industrial equipment manufacturers receive orders for new equipment and everything related to it. This represents a potential growth of 50% over the next five years over the previous decade.

Finally, chemical companies and other industrial gas consumers will benefit from reduced energy costs.

This will affect regional markets and change the direction of energy-intensive product flows.

The switch to LNG could put more pressure on other sectors, including those dependent on coal. Coal carriers may face a 5% decline in revenue in 2020 as more customers switch from coal to gas.

It should be noted that the construction of LNG plants around the world has a positive impact on the environment. Liquefied natural gas offers an alternative with lower CO2 emissions compared to solid fuels. However, the environmental benefits of switching to LNG vary greatlu.

Supply chain efficiency is key as distribution factors such as methane leakage can reduce these benefits.

Investment risks: In the LNG industry, long-term contracts are the main mechanism for ensuring coordination between all parts of the value chain.

Such coordination is necessary because the production capacity of Liquefied natural gas plants is in many ways limited by the capacity of transport systems.

The liquefied natural gas industry has a high level of investment risk due to the small number of alternative uses for LNG plants, terminals and ships, as well as the high volume of investments. Until now, there is high uncertainty about large LNG projects.

The risk factors for the construction Liquefied natural gas plants are as follows:

• Product prices are falling faster than costs.
• Concerns about security of demand (risk of recession).
• Conflicts in the distribution of gas supplies.
• Financial obstacles of all kinds.
• Environmental problems.
• Political tensions.

Uncertainty complicates the process of making investment decisions, since it is not known how much capacity will be commissioned in the coming years.

The risk is clear when you look at the delays that some companies face.

These delays are due to financial, environmental, social, regulatory and political issues. The planning, construction and commissioning times for LNG plants sometimes reach 4-6 years. During this time, the economic situation, demand and production can change significantly, so investors need accurate forecasts.

Liquefied natural gas plants: projects technology

Liquefied natural gas production is a proven technology that has been successfully used in the energy sector for many years.

Typically, an Liquefied natural gas plants consists of the following elements:

• Gas pre-treatment and liquefaction line.
• LNG production equipment.
• Protected gas storage tanks.
• Equipment for loading gas carriers.
• Auxiliary systems.

The transformation of natural gas into a liquid state is carried out in several stages. In the first stage, impurities (primarily carbon dioxide and minimal residues of sulfur compounds) are removed.

Then water is removed, which can turn into crystals and damage the system.

The next stage is the removal of heavy hydrocarbons, after which mainly methane and ethane remain. Recently, for the purpose of complex gas purification from moisture, carbon dioxide and heavy hydrocarbons, the adsorption method of deep gas purification on molecular sieves has been used. The gas is then gradually cooled by passing through several heat exchangers (evaporators).

Purification and fractionation are carried out, like most cooling processes, under high pressure.

The temperature is reduced to -160C using refrigeration cycles. Under these conditions, natural gas becomes a liquid at atmospheric pressure.

The construction of LNG plants begins with the selection of the most suitable technology.

There are currently seven LNG production technologies in use worldwide, including AP-C3MR, AP-X, AP-SMR, MFC, PRICO, DMR, Liquefin and Optimized Cascade.

However, Air Products remains the industry leader.

The AP-SMR, AP-C3MR and AP-X processes developed by this company account for over 80% of the market.

The only competitor for these processes is Optimized Cascade technology from ConocoPhillips.

AP-SMR (single mixed refrigerant) is traditionally used for onshore LNG plants, typically with a capacity of up to 1 million tons per year per line. Several separate lines are needed to increase the capacity of the plant. A feature of the AP-SMR is a unified automated system that simultaneously controls several gas turbines. The use of a mixed refrigerant increases the efficiency of heat exchange.

AP-C3MR is often used in the construction of LNG plants.

This technology accounts for the vast majority of the world’s liquefied natural gas production capacity. The AP-C3MR process uses two separate refrigerant cycles. The propane cycle is designed to pre-cool natural gas and partially dilute the refrigerant, and in some cases remove fuel gas (used for plant needs), while the mixed refrigerant cycle is used to liquefy and sublimate natural gas.

C3MR is a proven technology, proven over decades, making it suitable for many onshore plants. For floating LNG plants, this technology looks less attractive due to the large supply of propane, especially when kettle-type heat exchangers are used. Storing propane requires an increased strength tank where the working fluid is stored.

Since the C3MR process in floating LNG plants is of low appeal, Air Products has developed the more efficient AP-X technology (which is used in a number of large production lines in Qatar). An external nitrogen cycle is used to liquefy natural gas. Compression of nitrogen refrigerant is performed in three stages, which helps to optimize the process when there are significant fluctuations in natural gas flow.

The above technologies for the production of liquefied natural gas, as a rule, are used for the production of large volumes intended for further export.

Low-tonnage LNG plants also have a high development potential, meeting the demand of individual enterprises.

Estimated cost of building LNG plants

The gas industry is characterized by significant investment in infrastructure, unlike other solid or liquid energy sources that are easy to store and transport without an increased risk of loss.

The fact that natural gas is difficult to extract and transport via gas pipelines to the consumer’s boiler has slowed the development of the sector for many years.

It would seem that these disadvantages are not inherent in LNG, since it is transported in liquid form by sea like oil, without pipeline restrictions. But the fact that it must be liquefied and stored at low temperatures makes it difficult to handle and requires strict safety regulations.

Consequently, the LNG value chain also requires large investments.

Today, we see a reduction in capital costs at all links of the chain, including the production of LNG. This is happening both as a result of improving technologies and increasing capacities, and as a result of increased competition between technology and equipment suppliers, shipyards, etc.

Over the past 10 years, the cost of capital per unit of production at liquefied natural gas plants has decreased by 25%, for LNG tankers this figure has dropped by 35%, and at regasification terminals by 20% over the same period.

The cost of LNG plants can vary widely.

Building an LNG plant in Norway is not the same as implementing a similar project, for example, in Nigeria. Obviously, the availability of engineers, trained personnel, workshops and logistics services plays an important role.

Building a liquefied natural gas plant or receiving terminal near an existing port is not the same as building tens of kilometers from the sea coast. Floating LNG plants require a specific approach.

The approximate investment amounts given below are only averages and can vary greatly depending on the project conditions.

In the late 2000s, building an LNG plant from scratch with an estimated capacity of 8 million tons per year (MTPA) cost $ 1.5-2 billion.

Of this amount, 50% was for engineering design, construction and installation, 30% for the purchase of equipment, and the remaining 20% ​​for building materials.

The previous example refers to large LNG plants designed to supply large existing markets.

On the other hand, when a company is about to open up a new market or cover an emerging shortage in a small market, it makes sense to build a smaller plant with the prospect of future expansion.

Building LNG plants with a lower capacity is more expensive in terms of MTPA.

Thus, a plant with a capacity of 4-5 million tons of LNG per year at the end of the 2000s cost about $ 1 billion.

Due to the reduction in the cost of technology and equipment, the cost of liquefied natural gas plants has dropped significantly, and the scale of projects has increased.

Our services in the field of construction of LNG plants

CP Finance UK Finance offers a full range of services in the field of financing and construction, modernization and expansion, maintenance and operation of liquefied natural gas plants in Europe, Latin America, North Africa and the Middle East.

Services include:

• Feasibility study and financial modeling.
• Development of a general project and detailed design.
• Design and manufacture of customized LNG equipment.
• Construction and commissioning.
• Consultations during the operation of the plant.
• Modernization and expansion.

Cooperation with CP Finance UK Finance brings clear benefits to our customers in the form of favorable financing conditions, cost-effective production, high reliability, long equipment life and a quick return on investment.

We can design the optimal workflow for your business in order to simplify your LNG production scheme, saving on future plant expansion. A tailor-made approach contributes to reduced feed gas consumption, stable operation at low pressure and other benefits.

CP Finance UK Finance and partners help major energy companies around the world to achieve their goals.

In recent years, the EPC contract has become the most common form of cooperation in the construction of large-scale facilities such as LNG plants and terminals.

The advantage of an EPC contract for investors is that a single professional contractor performs all the work and bears full responsibility for the implementation of the project.

Contact us at any time to learn more about the construction of LNG plants under the EPC contract.

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Energy sectors Project finance ( in the  is driving innovation and the green transition, providing reliable power generation and gradually reducing the carbon footprint of the global economy.

Project finance schemes are enabling an increasing number of companies to switch to renewable energy sources such as wind farms, photovoltaic plants, biogas power plants and others.

At the same time, access to high financial leverage facilitates the implementation of large conventional energy projects as a bridge to a sustainable future, including the modernization of coal-fired thermal power plants, the construction of gas-fired combined cycle thermal power plants and other facilities.

It is becoming increasingly difficult for companies specializing in energy projects to implement capital-intensive projects without a high share of equity capital, especially against the backdrop of increasingly tight regulation in the banking sector.

Innovative project finance mechanisms, long-term investment loans, mezzanine capital, reliable loan guarantees and comprehensive consulting support allow our clients to implement large energy projects with 90% debt financing.

Contact CP Finance UK Finance to find out more.

Project finance in the renewable energy sector

Project finance refers to a method of raising long-term debt financing for large projects through financial engineering tools based on loans provided against the future cash flow generated by the project.

A distinctive feature of project finance is the participation of the SPV (special purpose vehicle), which is engaged in attracting the resources necessary for the implementation of the investment project, ensures its construction and makes payments on loans issued to energy sectors project finance  from the funds received through energy generation.

Securing the return of borrowed funds attracted to finance an investment project is the cash flow generated by the project. In addition, assets created during the implementation of the RES project can be provided as collateral. In other words, PF schemes do not require sponsors to provide their assets to ensure the return of received borrowed funds at the initial stage of the investment stage of the project. This makes project finance a fairly risky tool for capital providers.

Project finance in renewable energy is characterized by the following features:

• Comprehensive analysis of projects.
• Rational sharing of risks between project stakeholders.
• High requirements for the margin of safety of projects.
• Tender approach to the selection of suppliers and contractors.
• Complex contract structure of RES projects.
• Strict monitoring and control at all stages.

An important aspect of the implementation of energy projects, in addition to technology development, is the diversification of financing sources, in particular, the issuance of various types of securities.

The evolution of the financial market over the past decades has led to an increase in interest and the formation of a high demand for project finance bonds, opening up wide opportunities for financing renewable energy projects.

It has become profitable for commercial banks to refinance long-term investment loans in the bond market through the additional issuance of PF bonds or securitization.

At a certain point, the assets of the renewable energy sectors project finance had one of the highest potentials for securitization.

Starting around 2015, financial market participants began to actively use green bonds, which allowed energy companies to finance renewable energy assets by issuing bonds, the proceeds of which are directed to projects or activities with environmental goals. The growth in renewable energy funding has had a positive impact on the construction of photovoltaic power plants, offshore wind farms and other environmentally friendly energy projects in Europe and beyond.

Solar power plants

For project finance, solar energy projects are more suitable than wind generation projects, which are considered more technically complex and risky.

The commissioning of new photovoltaic power plants creates significant potential for the issuance of project finance bonds in the field of solar generation around the world. The specificity of solar energy technologies is such that continued investment in this sector is accompanied by a significant reduction in the cost of technologies and an increase in the competitiveness of the energy produced due to economies of scale.

Skyrocketing prices for natural gas, fuel oil and coal, caused by geopolitical tensions on the European continent in 2021-2022, are also boosting investor interest in energy sectors project finance.

It is one of the most well-studied and predictable sources of energy, making entire industries independent of fossil fuels.

Thanks to changes in the fossil fuel market and active support from governments, energy sectors project finance  has become very attractive.

Compared to other renewable energy facilities, solar energy projects are the most typical from an engineering point of view, since the technologies and equipment used in the construction of solar power plants are largely identical in projects implemented around the world. Low risk and predictable performance are some of the reasons why project finance models are extremely widespread in the construction of solar power plants.

Today, there are dozens of large solar power plants of various types around the world built using project finance.

Among them we can mention Benban Solar Park (Egypt), Noor Power Plant (Morocco) and others. Major financial institutions and companies such as Acciona Energy are actively involved in the development of innovative solar projects, making an invaluable contribution to the energy transition.

Wind farms

Project finance, being one of the priority tools for stimulating economic growth, allows the implementation of large-scale wind projects such as the construction of offshore wind farms.

The latter, having enormous development potential, are considered as one of the main sources of green energy for coastal regions, in particular for European consumers near the North Sea and the Baltic Seas. This is confirmed by the achievements of Germany, Denmark, Poland and other countries.

In Germany, using the project finance tool, the Nordsee ONE and Butendiek wind park projects were successfully implemented.

For their implementation, independent companies were established, the purpose of which was the development, financing, construction and operation of wind farms.

For example, Nordsee One GmbH was established for the Nordsee ONE park, while Western Power Distribution became the co-owner, operator and developer of the Butendiek wind farm.

International experience shows that global climate issues and rising fossil fuel prices are leading to an increase in project finance activity in the wind energy industry, especially in Europe and North America. The trend towards increased use of project finance schemes in the EU can be largely attributed to government programs, in particular targeted efforts to attract investment in renewable energy sources.

These government efforts are complemented by leading wind turbine manufacturers such as Siemens Gamesa and Vestas, who are investing hundreds of millions of euros to improve equipment capacity, reliability and reliability.

Hydropower plants

The top ten countries in terms of installed hydropower capacity remain unchanged over a long period of time.

China, Brazil, Canada, USA, Russia, India, Norway, Turkey, Japan and France remain the leaders, together accounting for more than two-thirds of the world’s installed capacity. These are countries that, due to the abundance of water resources, are able to develop hydropower projects on a sufficient scale and with high economic efficiency.

However, there are fewer and fewer suitable sites for new HPPs, which, along with tightening technical requirements, increases the cost of engineering and construction of such facilities.

Due to financial and technical reasons, hydropower is inferior in terms of investment attractiveness to other sources of renewable energy, especially solar and wind energy. This has a negative impact on the investment in the industry.

Between 2015 and 2019, the global average annual growth in installed hydropower capacity was 2.1%, which is considered a very modest figure. The need for increased funding for hydropower projects is felt almost everywhere, from greenfield projects to capital-intensive modernization of existing HPPs.

Energy sectors project finance has traditionally played a critical role in this sector due to the huge initial costs and long payback periods of such projects.

Few companies, even in partnership with government organizations, are willing to bear such costs without external support.

The cost of building a hydropower plant varies widely, depending on the specific location and natural conditions, the technology used and the scale of the project.

Previously, such facilities could build about 500,000 euros per 1 MW of installed capacity, but now the construction of hydroelectric power plants in hard-to-reach river sections in compliance with the strictest environmental requirements can easily exceed 4 million euros per 1 MW of installed capacity.

The establishment of a special purpose vehicle, isolation of project assets from its initiators, high financial leverage and rational distribution of project risks create the most favorable conditions for attracting financing for the construction of hydropower plants in the current environment.

Project finance in the conventional energy sector

Thermal power plants at the initial stage of construction are generally considered to be a cheaper solution compared to energy sectors project finance of similar installed capacity.

However, the exorbitant prices of natural, gas and coal make these plants quite costly to operate, so the cost of electricity produced can rise substantially during times when fossil fuel supplies are scarce. As a controversial energy source with an uncertain future, conventional energy facilities are now considered risky investments, which explains the difficulty of financing such projects.

Since thermal power plants are directly dependent on the availability of fossil fuels, in many cases these facilities are built near energy sources such as coal fields, liquefied natural gas terminals, large pipelines, refineries, and so on. Usually these are very large projects with an installed capacity of 1 to 3 GW or more, consisting of several multi-megawatt power units and a developed infrastructure.

The cost of such facilities can run into many hundreds of millions of euros, which poses serious long-term financing problems for sponsors.

Project finance is now widely used in the thermal power industry, providing companies with the effect of high financial leverage and convenient financing mechanisms with minimal risk.

Some features of PF model are listed below:

• Flexible application of a wide range of financial mechanisms, including long-term investment loans, the issuance of corporate securities and others.

• Using future financial flows as collateral for debt, as well as providing assets of a special project company created as part of a specific thermal power plant project as collateral.

• Energy project financing is carried out through a specially established legal entity (SPV, SPE, SPC), which is formally independent of the initiators and has separate assets.

• Adequate level of financial participation of the project sponsors, which can reach 10-20% of the estimated project cost or more, depending on the agreements. Thus, 80-90% of project costs are covered by banks / investors, which allows using the effect of financial leverage.

• Given the complete absence of collateral or its limited nature, the reliability of the PF model is ensured by a complex multilateral contractual structure with a rational distribution of risks and responsibilities of the parties.

In fact, the project finance (PF) is justified only by the high reliability of the project and the high confidence in the technologies, which can be achieved with sufficient experience and professional approach of the contractors.

Obviously, this is much more applicable to traditional energy sources than to little-studied alternative technologies.

Combined cycle power plants

Project finance, based on the repayment of project debts from future cash flows, has been considered for several decades as one of the best solutions for conventional energy facilities.

This is especially true when it comes to large capital-intensive projects built on proven and reliable low-risk technologies. Highly efficient and reliable Combined Cycle Gas Turbine (CCGT) power plants are now considered mainstream in the thermal power sector. This is an area where the potential benefits of project finance models are fully realized.

World experience in the construction and operation of thermal power plants has shown that the generation of electricity and heat at them is most effective in combined-cycle gas turbine power plants, which include a gas turbine and a steam turbine.

As a result of this combination, the heat is fed into the gas turbine (the cycle at a high initial temperature of the combined system), and the unused heat is removed to the steam turbine, which operates at a relatively low temperature.

This technology provides the maximum efficiency that can be achieved by burning fossil fuels.

As an important bridge between conventional energy and a carbon-free future, gas turbine combined cycle power plants powered by natural gas are now regarded as one of the most important sources of electricity for industry and households in developed countries.

Despite the problems caused by the explosive growth in hydrocarbon prices, highly-efficient CCGT projects continue to be seen as one of the pillars of the global economy for the coming decades.

Project finance plays an important role in modernizing and improving the efficiency of the European energy sector, supporting local economies against the backdrop of rising hydrocarbon prices. One example is the recent 560MW CCGT plant project in Grudziadz, which is being developed jointly with MYTILINEOS and Siemens Energy Global GmbH.

The power plant, an EPC contract for the construction of which has been signed since May 2022, will be financed through a special purpose vehicle on a PF basis.

Modernization of coal-fired thermal power plants

 

CP Finance UK offers financing for Steam power plants construction and  comprehensive professional services in the energy sector:

• Modernization of energy facilities.
• Operation and maintenance.
• Engineering design of thermal power plants of all types.
• Construction of steam power plants under the EPC contract.
• Pre-investment research.
• Financing large energy projects.

Together with international partners, We are present in Europe, Latin America, North Africa and the Middle East together with the assistance of our high-net-worth angel investors.

An impeccable reputation and satisfied customers in many countries are the best confirmation of our commitment to innovation and high service.

Our specialists are ready to provide you with any services related to the financing of TPP projects.

Contact the company’s consultants to learn more about our services.

Modern classification of thermal power plants

Modern steam turbine power plants that run on coal, natural gas and other fossil fuels will remain in demand in the coming decades, despite the growth of renewable energy sources.

Today, energy companies are forced to solve numerous technical, financial and environmental problems, meeting the growing demand for electricity and flexibly responding to load fluctuations caused by the introduction of RES.

Steam power plants construction with high efficiency and minimal emissions can increase and improve the competitiveness of thermal energy.

According to the EIA, the average age of thermal power plants in the United States today reaches 40 years.

In some countries this figure is even higher. By 2050, the share of fossil fuels in the global energy mix will be about 50%. Under these conditions, the efficiency of TPPs will be critically important for a sustainable future. It is obvious that numerous steam power plants today require deep modernization.

Currently, there are different methods of generating electrical energy from fuel combustion, which differ depending on the type of fuel and the specific combustion technology.

The main fuels for this purpose are coal, oil, gas, petroleum coke and biomass.

The combustion of each of these fuels is different, therefore, in the engineering design of TPPs, different approaches are applied to fuel preparation (drying, grinding), the choice of generators and turbine equipment.

At present, thermal energy in the world is radically changing, while a combined cycle is often used for the planned modernization of conventional steam TPPs.

When it comes to fuel, natural gas continues to gain in popularity.

Nevertheless, the construction of new steam power plants is of great importance for local economies, especially in terms of co-firing waste and coal. These projects are actively developing in regions of the world with intensive agriculture and logging due to the high energy potential of waste generated in these processes.

The principle of operation of steam turbine power plants is considered simple. The fuel is burned in a boiler that generates thermal energy, which is used to generate steam from the water circulating through the piping system. This steam drives a steam turbine and converts thermal energy into mechanical energy, which generates electricity in an alternator.

Steam power plants construction is a complex multi-stage process that requires time-consuming and expensive research, approvals and permits. These objects are distinguished by an impressive area.

Thermal power plants require extensive infrastructure development, and in many cases leave a deep ecological footprint.

Thermal power plants are usually located close to seas, lakes or rivers in order to make it easier to obtain large volumes of water to cool equipment. These facilities can operate on coal as well as on fuel oil and natural gas. Typically, fuel oil arrives at TPPs through pipelines and is stored in tanks. Natural gas, in turn, is supplied through a special gas pipeline. Solid fuels are usually delivered by rail, which requires the construction of additional infrastructure.

During the engineering design of steam power plants, it is important to select the most suitable equipment and design the layout.

Consideration should be given to the planning of components such as cooling pond, pipelines, railway and unloading station, sludge storage, and so on.

Steam power plant construction cost

Many companies are interested in the cost of engineering design and construction of steam power plants.

The total cost of a project is always determined by a combination of factors, which we will discuss below. Any figures without analysis of a specific project should be considered approximate.

In general, Steam power plants construction with a capacity of 500-700 MW can cost about 500,000 euros per MW.

If construction is carried out under the EPC contract (single general contractor), this figure increases.

Major investment costs include:

• Installation of a turbine group (steam turbine and generator).
• Ancillary equipment and control systems.
• Construction of an electrical substation.
• Laying of power lines.
• Civil engineering.
• Boiler and steam generator installation.
• Construction of a water cooling circuit.

Significant investments are also associated with research, engineering design, obtaining permits, construction of a cooling pond, etc.

When assessing the cost of building a steam power plant, internationalization factors (project implementation in another country) should be considered. In addition, any construction under an EPC contract will be slightly more expensive due to the general contractor’s margin, which is usually 10%.

It is important to take into account the factors of hiring local staff in the host country, the cost of obtaining permits and licenses, the cost of importing equipment and building materials (import taxes, travel costs and customs duties).

CP Finance UK underwritten team will help you calculate the cost of the project based on all of the above factors.

With extensive experience in the construction of power plants around the world, we, together with partners, will implement your project in the optimal time frame with minimal costs.

Our team is actively involved in financial modeling, advising foreign customers on project financing.

Through cooperation with major banks, we also help our clients in obtaining loans for the construction of steam power plants and other large energy facilities. 

Email:finance@cpuk-financeltd.com
Website:https://c-pfinanceuk.com/

 

Chemical industry financing in Germany is characterized by a high technical level and a wide variety of products, which includes basic chemical products, chemical fibers, drugs, cosmetics, adhesives, fertilizers and much more. About 70% of the industry’s output consists of chemical raw materials and semi-finished products, which are further used in industry.

The chemical industry is closely linked to almost all sectors of the German economy and is an integral part of many value chains such as automotive industry, fuel industry, shipbuilding and construction. As of 2020, the chemical and pharmaceutical industry, which is the third largest industry in Germany, accounted for almost 11% of industrial sales in the country.

Chemical industry financing in Germany, including pharmaceutical enterprises accounted for more than 12% of investments in fixed capital of manufacturing sector.

One of the features of the German chemical sector is its deep penetration into foreign markets. In 2019, a significant part of the profits are received by foreign enterprises, where more than 400 thousand employees worked, producing chemicals worth 210 billion euros.

The German chemical & pharmaceutical industry accounts for almost a quarter of chemical turnover in the European Union.

It ranks third in the world after China and the USA. In Germany, chemistry is one of the most important sectors of the economy, responsible for a turnover of almost 190 billion euros and employing more than 460,000 people.

Investments in German chemical industry in 2020 amounted to about 8.5 billion euros.

Significant sources of Chemical industry financing in Germany long-term bank loans, mainly received from commercial banks.

A brief overview of financing German chemical industry 

The chemical industry in Germany is one of the most well-established in the world, and a world leader; a quarter of the chemicals made in the EU, are made in Germany. Currently the German industry, turning over 160 billion euros is the European leader, and the third-biggest in the world.

The largest companies of the chemical and pharmaceutical industry in Germany today include BASF SE, Bayer AG, Fresenius SE & Co, Boehringer Ingelheim, Henkel AG & Co, Merck KGaA, Evonik Industries AG, Covestro AG, B. Braun SE, Beiersdorf AG and others.

Global corporations listed on the Deutscher Aktienindex (DAX) dominate public perception, while in reality most of Germany’s 2,100 chemical companies are small and medium-sized businesses.

As high energy prices take an especially heavy toll on Europe’s industrial powerhouse, chemical companies consider moving production elsewhere.

Natural gas defines Germany’s energy system. We’ve done nothing for years but switch our entire energy supply from oil and coal to gas, for reasons such as climate protection,” says Jörg Rothermel, an energy expert at VCI, Germany’s main chemical industry trade group. “I don’t like to make sweeping statements, but it’s never looked as bleak as it does today.”