The economic roller coaster of recent years has presented threats as well as opportunities for engineering and construction companies. Tough times have been especially difficult in countries and for companies that depend heavily on a limited range of industries. So, when financial difficulties made it impossible for Abengoa, an engineering-and-construction (E&C) company, to complete Norte III, a 907 MW combined-cycle power-generation plant in northern Mexico, Techint Engineering & Construction had strong incentive to try to pick up the pieces.
Norte III is an independent power project (IPP) led by Federal Electricity Commission (CFE), the state-owned electric utility in Mexico. The Norte III IPP hired Abengoa to finance, build and operate the power plant for 25 years. Techint was bound by the original IPP.
“Rebidding would have caused an unacceptable delay. We offered to renegotiate the loans and suppliers, and finish the project,” said Pedro Gutiérrez, commercial director, North America, Techint Engineering & Construction. “It took 1-1/2 years to renegotiate. With many of the suppliers effectively in Chapter 11, it was very difficult.
“At Techint, we say any project that doesn’t die a couple of times is not a real project. This project died three times—the most difficult project we’ve ever approached.”
Gutiérrez spoke to attendees of his session, “Control solution to combined cycle power generation plant Norte III,” at the Foxboro User Group conference this week in San Antonio. Techint Engineering & Construction was founded 74 years ago in Italy, and it is now headquartered in Argentina with offices in 150 countries. With strengths in energy, mining and metals, it has completed 3,500 projects, currently has 24 in progress and is on track to reach $3 billion in revenue in 2018. “Our focus on safety, environment, standards and respect for local legislation sets us apart from others,” Gutiérrez said.
Norte III renegotiations
Along with simply wanting the work in lean times, Techint saw Norte III as an opportunity to position itself as an engineering, procurement and construction (EPC) contractor and developer in the power-generation market. To do this, it would have to deliver, per the original Abengoa contract, one 907-MW combined-cycle power plant to supply more than 500,000 homes and cover an annual energy growth demand of 3.6% per year.
The plant includes four gas-fired and two steam turbines, all made by GE. The turbines use Schneider EcoStruxure Foxboro controllers and HMIs. “Based on our experience, it’s clear that Foxboro controls are an improvement over GE’s,” said Gutiérrez.
CFE expected a transparent EPC change from Abengoa to Techint, so Techint needed to minimize engineering, commissioning and startup time, to leverage partnerships with experienced suppliers that have local execution capabilities with installed-base experience and, of course, to deliver a competitive price.
“CFE could not renegotiate any prices with us; we had to keep the exact same figures. We could only negotiate the schedule,” said Gutiérrez. “It took months to review the Abengoa engineering work, which we found to be good. We renegotiated 47% of the loans and found new ones. We renegotiated 156 agreements with suppliers, including Schneider Electric.”
Schneider Electric had been selected by Abengoa. A world leader in safety, process and reliability control, the company also has experience in combined-cycle power plants in Mexico. It has a good reputation in project work and is a trusted vendor to CFE.
“We took over the negotiations and presented tough conditions. Schneider worked with us,” said Gutiérrez. “They offered a better price than their competitors and included added value based on IIoT.”
More than a control system
The control solution includes apps, analytics and services, edge control and connected products delivered via EcoStruxure Plant, which also handles GPS synchronization, sequence of events (SOE) and remote communication with the country’s National Electrical Center (CENACE). An EcoStruxure Foxboro DCS uses the company’s high-availability mesh control network to connect FCP 280 controllers, Compact 200 Series I/O modules and fieldbus modules for distributed network protocol (DNP3), IEC-61850 and Modbus TCP/IP communications. It also integrates third-party wired and wireless communication protocols.
Factory acceptance testing (FAT) involved two processor cabinets, one server cabinet, 18 remote cabinets, one third-party integration cabinet, seven operator stations, one engineering station, two historical servers and one web server. The hardware FAT has been successfully completed, and the software FAT is in progress. Gutiérrez said, “The project is now 65% done and will finish at the end of next year.”
Gutiérrez praised Schneider Electric’s response to the challenges of Techint’s contract, which included an aggressive equipment delivery schedule (six months) and plans for a startup early in 2019. “Schneider Electric has vast experience in combined-cycle power plants in Mexico, and they are trusted by CFE, which used to also produce electric power,” he said. “Compared to competitors, we see Schneider Electric as providing a different level of technology and support.”