TANJUNG JATI B UNITS 3 & 4 ELECTRIC GENERATING STATION PROJECT A MULTINATIONAL EQUIPMENT SOURCING BENCHMARK. Michael W. Johnson Cheng Gang Wang Sen

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1 TANJUNG JATI B UNITS 3 & 4 ELECTRIC GENERATING STATION PROJECT A MULTINATIONAL EQUIPMENT SOURCING BENCHMARK Michael W. Johnson Cheng Gang Wang Sen Black & Veatch International, China Copyright Black & Veatch All Rights Reserved. 1

2 ABSTRACT The 661 megawatt (MW) (each net) pulverized coal Tanjung Jati B Units 3 & 4 Electric Generating Station, located on the northern coastline of Central Java, Indonesia, began commercial operation on 13 October 2011 (Unit 3) and 01 January 2012 (Unit 4). These completion dates were slightly ahead of the scheduled commercial operation milestones of 15 October 2011 and 15 January 2012, respectively. Sumitomo provided Black & Veatch with a full release on 30 June The project was led by Sumitomo Corporation with the units operated by PT PLN (Persero), Indonesia s state-owned power utility. PT Central Java Power, a Sumitomo Corporation subsidiary, will own the plant for 20 years before transfer to PT PLN (Persero). Sumitomo selected Black & Veatch to deliver the plant s boiler island auxiliary equipment package. Black & Veatch s scope included engineering, procurement, and commissioning services for coal handling, limestone handling, electrostatic precipitators, induced draft fans, flue gas desulfurization, fly ash handling, continuous emissions monitoring, fire protection, and fuel oil supply as well as other miscellaneous support systems. Figure 1. Tanjung Jati B Facility (looking south from coal jetty) Toshiba Corporation Power Systems Company provided the turbine island equipment, and Mitsubishi Heavy Industries, Ltd. provided the boiler island equipment. All civil work was done by Mitsui Engineering & Shipbuilding Co., Ltd. Copyright Black & Veatch All Rights Reserved. 2

3 The equipment supplied by Black & Veatch for this project was primarily provided by Chinese equipment suppliers. Black & Veatch has for many years used select China suppliers, and the company has invested in the activity of prequalifying high quality Chinese equipment suppliers. This project gave Black & Veatch the opportunity to utilize these suppliers to provide quality Chinese equipment for this global project. Although there have been a series of troubled projects in Asia completed by Chinese Engineering, Procurement, and Construction (EPC) contractors, this project was a success by both Owner and contractor standards. All equipment was delivered on time to support construction, with commissioning occurring within the time available to meet all project milestone dates. All performance guarantees were met for auxiliary power and emissions. This paper includes a summary description of the power station, an outline of Black & Veatch s execution plan, and a description of Black & Veatch s benchmark engineering and procurement solution, which provided reliable high quality Chinese equipment at the Tanjung Jati B Units 3 & 4 Electric Generating Station. EXISTING POWER STATION AND PROJECT SUMMARY The 661 MW (each net) pulverized coal Tanjung Jati B Units 3 & 4 Electric Generating Station (located on the northern coastline of Central Java, Indonesia) began commercial operation on 13 October 2011 (Unit 3) and 01 January 2012 (Unit 4). These completion dates were slightly ahead of the scheduled commercial operation milestones of 15 October 2011 and 15 January 2012, respectively. There are two existing units (Tanjung Jati B Units 1 & 2) operating at this site that achieved commercial status in 2005 and Each of these existing units has a rated net output capability of 660 MW. Black & Veatch also completed the Engineering and Procurement (EP) scope for the existing Tanjung Jati B Units 1 & 2. The complete Tanjung Jati B facility as viewed from the coal unloading jetty (including Units 1 thru 4) is shown in Figure 1. The Tanjung Jati B Units 3 & 4 Electric Generating Station project was led by Sumitomo Corporation with the units operated by PT PLN (Persero), Indonesia s state-owned power utility. PT Central Java Power, a Sumitomo Corporation subsidiary, will own the plant for 20 years before handing it over to PT PLN (Persero). Copyright Black & Veatch All Rights Reserved. 3

4 Black & Veatch s scope of supply consisted of the boiler island auxiliary equipment package. Boiler, turbine, civil design, and construction and erection of Black & Veatch-supplied equipment were provided by separate entities. As a result, Black & Veatch interfaced and coordinated with multiple entities, which elevated the project s execution complexity. The plant s expansion provides a major boost of reliable power to support the country s economic growth. The Tanjung Jati B Electric Generating Station (Units 1 through 4) provides approximately 12 percent of the electricity available on the Java-Bali grid. PROVEN BLACK & VEATCH PROJECT EXECUTION Coal fired power plant projects are complex. Successful execution requires dedicated work from many talented professionals, often including several organizations. All major projects begin with a vision, but significant planning (development, conceptual design) and rigorous execution are required to achieve project success. Figure 2. Tanjung Jati B Units 3 & 4 (portion of boiler island auxiliary equipment shown) Black & Veatch was responsible for the plant s boiler island auxiliary equipment package, and the equipment supply scope included engineering, procurement, and commissioning services for coal handling, limestone handling, electrostatic precipitators, induced draft fans, wet flue gas desulfurization, fly ash handling, continuous emissions monitoring, fire protection, and fuel oil supply (as well as other miscellaneous support systems). Care, Copyright Black & Veatch All Rights Reserved. 4

5 custody, and storage responsibilities for Black & Veatch-supplied equipment were turned over to the erection contractor upon the arrival of equipment on-site. The erection contractor (Toshiba Plant Systems & Services Corporation) was a separate project entity, not a Black & Veatch subcontractor. After erection of Black & Veatch-supplied equipment was completed, the equipment was commissioned by Black & Veatch. The erection contractor subcontracted the erection to Indonesia national contractors with Japanese supervision. Chinese erection contractors were not involved in the erection of the Chinese-manufactured equipment. Figure 2 shows the Unit 3 & 4 wet flue gas desulfurization equipment, electrostatic precipitators, and some of the coal conveyors. The equipment in Figure 2 is a significant portion of the boiler island auxiliary equipment package supplied and commissioned by Black & Veatch. The coal handling ship unloaders are shown in Figure 3 and one of the coal handling stacker reclaimers is shown in Figure 4. OVERCOMING EXECUTION OBSTACLES Executing this project presented significant challenges. Primarily, the utilization of Chinese equipment needed to be addressed. For many years, Black & Veatch has been screening and prequalifying Chinese equipment suppliers, identifying the best companies that can meet project quality, cost, schedule, and performance objectives. Black & Veatch deployed its expansive global sourcing network and China Export strategy for the Tanjung Jati B Units 3 & 4 Electric Generating Station project (the company s first major opportunity to demonstrate this strategy s effectiveness). The approach utilized to successfully complete this multinational venture project paves the way for future reliable, low cost coal projects in Asia and other regions throughout the world. Exporting Chinese equipment for assembly in another country by a non-chinese erector leads to many challenges. The challenges are first addressed by selecting high quality Chinese suppliers and then following up by putting a strong emphasis on product quality during the design and manufacturing stage. Over 250 supplier shop inspections were performed, plus full-time quality personnel were placed in many key fabrication facilities. Timely completion of all deliverables in a quality manner was critical to project success. Black & Veatch worked to ensure that communication was clear, quality documents were provided, and timely deliveries occurred to support the Indonesia-based erection contractors in the field. High quality documentation was also necessary to support Black & Veatch s commissioning scope to ensure meeting project milestones. Black & Veatch s Beijing engineering team, Copyright Black & Veatch All Rights Reserved. 5

6 consisting of approximately 50 full-time professionals, reviewed and processed over 17,000 engineering documents from equipment suppliers. A large percentage of these drawings were commented on and returned for revision several times before achieving the level of quality required. Because of Black & Veatch s thorough diligence and proactive approach, the company was able to provide a complete product (documentation and materials) that met the needs of the site teams in support of the project s schedule. GLOBAL ENGINEERING AND PROCUREMENT LEADERSHIP Engineering and procurement were largely performed by Black & Veatch s Beijing project execution office, supported by the company s integrated Bangkok, Pune, and USA execution teams. All work was completed to support schedule deliverable requirements, equipment procurements, and the overall project schedule. Black & Veatch s Beijing office is staffed with highly competent engineering and procurement professionals who provide high quality design deliverables at a competitive cost (for a competitive global marketplace). Most of the key individuals working on this project for Black & Veatch have 10 to 20 years of experience in power station design and have worked in the Beijing office 6 to 8 years. These highly skilled local engineering and procurement professionals worked closely with prequalified Chinese suppliers to ensure timely, seamless execution. Black & Veatch s large quality control staff also monitored supplier shop fabrication activities, verifying that the suppliers equipment provided met Purchase Order requirements (during manufacture) to support its desired shipping schedule and quality objectives. Good teamwork and collaboration between the Black & Veatch execution team and suppliers were maintained throughout project execution. Copyright Black & Veatch All Rights Reserved. 6

7 Figure 3. Tanjung Jati B Units 3 & 4 Coal Ship Unloaders Equipment was generally shipped from the port of Shanghai, China (port of origin) to Semarang, Indonesia, and then transported by truck to the jobsite. Some of the largest components were transported by barge from Semarang directly to an unloading jetty at the jobsite. Ensuring that shipments to the field were consistent with Purchase Orders was also critical to the success of the project. It should be noted that the Chinese suppliers did not have extensive experience in shipping their products overseas, so Black & Veatch worked with each supplier s and Black & Veatch s freight forwarder to ensure suitable packaging for overseas shipments. This activity is critical to prevent delays from occurring because of the need for replacing materials that were damaged during shipment. Equipment supplied to the field was manufactured in accordance with Chinese Codes & Standards. Once equipment reached the field, Black Veatch utilized its large, experienced staff of primarily Southeast Asia professionals together with Chinese engineers (both from Black & Veatch and its suppliers) to respond quickly to any issues related to supplied equipment. Quickly responding to questions prevented delays in the erection schedule. Additionally, close coordination between the civil contractor, the erection contractor, and Black & Veatch was required to identify and address any deviations between the Chinese Codes & Standards and global codes typically followed by erectors. Examples of code deviations included tolerances placed on anchor bolts (cast-in-place), structural steel bolts (tightening), and steel columns (plumbness). The Chinese Codes & Standards typically have more stringent requirements than the applicable global code in these areas. Copyright Black & Veatch All Rights Reserved. 7

8 Figure 4. Tanjung Jati Coal Stacker - Reclaimer Close teamwork between Black & Veatch and its suppliers allowed them to utilize each other s strengths for project execution efficiency, particularly during the procurement stage of the project. For example, if Black & Veatch s supplier lacked sufficient experience in a particular aspect of the scope that had been defined, Black & Veatch stepped in and performed the scope as required. As needed, Black & Veatch shifted project scope to one of its many capable global execution offices (depending on workload and required expertise). Its common global platforms and approach to projects and well established codes and standards ensured execution continuity and timely completion. Black & Veatch s deep inhouse global power expertise and integrated global execution teams helped to produce quality, timely deliverables and continuous client service. In summary, many talented Black & Veatch professionals were responsible for the execution success of the Tanjung Jati B Units 3 & 4 Electric Generating Station project. This included primary execution team members (Beijing-based) and other Black & Veatch offices (Bangkok, Pune, and Kansas City, USA-based professionals). Additionally, many talented professionals from Black & Veatch suppliers organizations contributed to the project s success. Black & Veatch s China Export vision, its strategic deployment, the company s utilization of its integrated global workforce, and close collaboration with suppliers (collective strengths benefit) provided the foundation upon which project success was achieved. The execution leadership displayed for the Tanjung Jati B Units 3 & 4 Electric Generating Station project establishes a benchmark that can be applied to future, complex global projects. It also serves as a model that will enable clients to Copyright Black & Veatch All Rights Reserved. 8

9 complete high quality reliable electric generating power stations at a competitive price to better serve their consumers. EARLY COMPLETION AND RELIABLE PERFORMANCE As previously stated, Unit 3 achieved commercial operation on 13 October 2011 (2 days ahead of schedule), and Unit 4 achieved commercial operation on 01 January 2012 (approximately 2 weeks ahead of schedule). All performance and emissions guarantees were met. SAFETY LEADERSHIP Safety was incorporated into every step of Black & Veatch s project execution plan. The result was over 1,700,000 hours worked without a lost time incident. Black & Veatch is proud of this achievement, made possible by incorporating safety conscious behaviors (based on its established safety programs) into every activity. MODERN EMISSIONS CONTROL TECHNOLOGY DEPLOYMENT AND EXECUTION EXCELLENCE The design of the units features a flue gas desulfurization system and electrostatic precipitators to reduce air emissions, resulting in a solution that minimizes environmental impact. These features, together with the equipment installed at Tanjung Jati B Units 1 & 2, represent some of the first examples of modern air quality control technology at major power plants in Asia. Emissions guarantees were set at 300 milligrams per normal cubic meter (mg/nm 3 ) for sulfur dioxide (SO 2 ) with total particulate at 50 mg/nm 3 for each unit. Performance testing verified that actual emissions were well below established guaranteed values. Auxiliary power testing of the units determined that Black & Veatch s boiler island auxiliary equipment auxiliary power usage was approximately 3 MW below the company s guaranteed megawatt consumption amount for its scope of supply. The plant s expansion provides a major boost of reliable power to support the Republic of Indonesia s economic growth. The Tanjung Jati B Electric Generating Station (Units 1 through 4) provides approximately 12 percent of the electricity available on the Java-Bali grid. Copyright Black & Veatch All Rights Reserved. 9

10 The collective efforts of many Black & Veatch professionals during the execution of the Tanjung Jati B Units 3 & 4 project will result in reliable sustainable power for many decades for the people of Indonesia. Copyright Black & Veatch All Rights Reserved. 10