China’s Shanghai Electric has announced it secured the Engineering, Procurement and Construction (EPC) contract and gas turbine supply agreement for Unit 3 of a 500 MW combined-cycle gas turbine (CCGT) power plant to be built at the Samalaju Industrial Park in Sarawak, Malaysia. The company stated this marks the first overseas project win for its heavy-duty gas turbines.
The scope of the contract is reported to include self-manufactured supply of the plant’s full equipment package, including the gas turbine, steam turbine, generator, heat recovery steam generator (HRSG) and air-cooled equipment, delivered on an EPC turnkey basis, along with a 25-year long-term service agreement (LTSA). Samalaju Industrial Park is an area with a concentration of energy-intensive industries such as aluminum smelting, and this CCGT Unit 3 is reported to be a project responding to the growing power demand from such regional industrial parks.
The power generation capacity is 500 MW, with the contract scope covering EPC turnkey supply including the gas turbine, steam turbine, generator, HRSG and air-cooled equipment. The long-term service agreement is confirmed at 25 years. The specific contract value has not been disclosed.
Sarawak state in Malaysia is reported to have been pursuing energy-intensive industries such as aluminum and data centers built on hydro and gas power, and this CCGT Unit 3 is seen as a project responding to the growing power demand from such regional industrial parks. For Shanghai Electric, this win is reported as an opportunity to secure its first overseas track record for heavy-duty gas turbines, serving as a foothold for expanding into overseas power generation markets going forward.
This contract win is seen as an example of a Chinese company making a substantive entry into the heavy-duty gas turbine market, which has historically been led by Western and Japanese firms such as GE, Siemens Energy and Mitsubishi Power. Shanghai Electric winning an overseas EPC turnkey project with a self-developed large gas turbine suggests that Chinese power equipment manufacturers’ technological competitiveness is beginning to gain recognition in international markets, potentially intensifying competition with established Western and Japanese gas turbine manufacturers in emerging markets across Southeast Asia, the Middle East and Africa going forward. Southeast Asia is a region that has continued to see CCGT power project orders driven by rising power demand from expanding data centers and industrial parks, and expanded contract wins by Chinese equipment suppliers and EPC contractors leveraging price competitiveness could reshape the regional power equipment market landscape. Established Western and Japanese gas turbine manufacturers and domestic EPC contractors alike may need to respond to this shifting competitive dynamic.
Whether the construction start, mechanical completion and commercial operation targets for this CCGT Unit 3 will be formalized is the first point to confirm. It is also worth watching whether Shanghai Electric will pursue additional gas turbine orders in other Southeast Asian countries or other regions following this win, and how established Western and Japanese gas turbine manufacturers respond to this competitive shift. Whether there are plans for further power capacity expansion within the Samalaju Industrial Park also warrants further confirmation.