Sept. 9 (Bloomberg) -- Samsung Engineering Co. received a $1.1 billion contract from Thailand's PTT Pcl to build gas plants, the biggest Thai order for South Korea's No. 1 engineering company.
The gas-separation project will be built in Rayong, about 180 kilometers (112 miles) southeast of Bangkok, Samsung Engineering said in an e-mailed statement today. The factories, to be completed by March 2010, will have the capacity to produce 1.6 billion cubic feet of gas a day.
Oil prices, which have almost tripled in the past five years, and economic growth are encouraging nations such as Qatar, United Arab Emirates and Thailand to invest in chemical plants and power stations. The spending surge will fetch South Korean contractors a record $24 billion in overseas orders this year, the nation's construction ministry has forecast.
``The needs for fuel-related facilities are increasing as economic growth in the world expands,'' said Lee Kwang Soo, an analyst with Tong Yang Investment Bank. ``That demand is helping South Korean contractors win more orders this year.''
The $1.1 billion deal includes the company's previous contract with the Thai company, which was announced on July 24, to build a chemical plant for $470 million.
``The $1.1 billion orders are for two construction contracts,'' Chitrapongse Kwangsukstith, senior executive vice president of PTT, said by telephone today. ``One for the gas separation plant and the other for a petrochemical plant.''
The gas separation plant is PTT's sixth such facility, which will be part of the company's plan to increase the value of natural gas from fields in the Gulf of Thailand, he said.
With the latest contract, Samsung Engineering has secured 3.8 trillion won ($4.1 billion) in orders this year, achieving 76 percent of its annual target of 5 trillion won. The company has so far received more than 90 percent of orders from overseas.
Shares of Samsung Engineering closed up 8,500 won, or 7.7 percent, at 118,500 won on Sept. 7 in Seoul. The stock has more than doubled this year, compared with the 31 percent climb in South Korea's Kospi index.
Samsung Engineering said on Aug. 14 net income rose 18.8 percent to 35.2 billion won in the quarter ended June 30 and sales gained 13.8 percent to 433.7 billion won.
An estimated $47 billion is expected to be spent every year until 2010 to meet growing demand for gas, which makes up about a quarter of global fuel consumption, Samsung Engineering said in the statement.
Doosan Heavy Industries & Construction Co., Samsung Engineering and other South Korean contractors received $21 billion in overseas orders as of Aug. 29, almost three times the amount a year earlier, the Ministry of Construction & Transportation said on Aug. 30. Of that total, contracts from the Middle East more than tripled to $14.5 billion and those from Asia more than doubled to $3.93 billion, the ministry said.
To contact the reporter on this story: Kyunghee Park in Hong Kong .Last Updated: September 9, 2007 00:58 EDT