SNC-Lavalin said PSEG Power awarded it an EPC contract for a 755-MW combined-cycle natural gas power project in Prince George’s County, Md., near Washington, D.C. The plant will connect to the Potomac Electric Power Co.’s 500 kV transmission line and will feature two gas turbines and one steam turbine.
The firm did not disclose the contract value, but Montreal-based analyst Yuri Lynk of Canaccord Genuity, estimates it to be between $800 million and $900 million.
"The U.S. power market continues to have a bright outlook, as cheap gas and a move away from coal have been driving the increase in award volume lately," he says. "However, as with any mature technology in a highly competitive sector, many E&C firms have seen significant downward pressure on margins with any execution issues causing a profound financial impact from cost overruns and liquidated damages."
Lynk contends that the firm's win last year of a similarly sized natural gas plant in Maryland "provides a level of comfort that SNC can execute profitably."