The Bechtel Report 2010 The Bechtel Report 2010

2 Welcome from the Chairman and the President

4 Business Review

6 Global Highlights

10 Oil, Gas & Chemicals

12 Government Services

14 Mining & Metals B E C H T E L 16 Civil Infrastructure REPORT  | San Onofre 2 0 1 0 steam generator 18 Power replacement, 1 , USA 22 Vision + Values

 | Cover photo: 24 Leadership Liqueied processing plant, Angola TO OUR CUSTOMERS, EMPLOYEES, PARTNERS, SUPPLIERS, AND FRIENDS Welcome

For Bechtel, as for the rest of the business world, 2009 was an extraordinarily challenging year. The global recession, which started to affect our industry in the fourth quarter of 2008, took a toll last year as customers reined in capital spending. Some projects we had won were postponed, while others already in progress were slowed down or reduced in scope. In a few cases, we lost big projects when competitors underbid us in a cutthroat environment. Despite the economic downturn, our company had a year about which we can be proud. We performed solidly on dozens of projects in 45 countries, completed a number of important jobs, and won signiicant new work. As always, safety was our top priority in 2009. We challenged our 49,000 employees and subcontractor colleagues to renew their commitment to working safely on every project and in every ofice. They responded by again making us one of the safest and companies in the world, with a record far better than the industry average. We are happy to report that 53 of our projects each achieved more than 1 million hours last year with no time lost because of an accident. Our main business focus last year after safety was on quality—doing every job right the irst time. Quality work is crucial to the success of every project, and it embodies our commitment to customer satisfaction. We are developing new ways to measure quality and integrate quality assurance into every project, from start to inish. In addition, we continue to reine our Six Sigma quality improvement program, now in its 10th year at Bechtel. We also strengthened our sustainability program, which helps customers enhance communities and protect the environment. A key component of that effort is job training for local workers, giving them skills they can use long after a project is complete. In Soyo, Angola, for example, a worker enhancement program has trained several thousand Angolans in project safety, work ethics, and construction skills. Forecasting the future is especially dificult in our industry, which is not on the same cycle as the overall economy. We are bracing for another tough year in 2010, B E C H T E L but as economic growth resumes, we believe we are well positioned to win new work REPORT 2 0 1 0 and maintain our standing as the world’s premier engineering, construction, and 2 project management company.

Riley Bechtel Bill Dudley Chairman & Chief Executive Oficer President & Chief Operating Oficer IN A GLOBAL RECESSION, BECHTEL New work booked in billions of U.S. dollars

DISTINGUISHED ITSELF WITH SOLID 35.0 35 34.1 PERFORMANCE AND IMPORTANT NEW PROJECTS. 30

24.7 25  | Artist’s rendition of a new station in Business Review 20.3 20 18.5

15 A tunnel beneath the streets of London will be The BrightSource solar power project was 10 the centerpiece of a new railway for commuters. A not the only bright spot for our Power unit. Work

long pipeline system will crude oil from moved ahead on a plant in Indiana that will use 5 to reineries in the . A solar cleaner technology to reduce emissions, and 0 thermal power complex in California will help usher several other plants under construction will feature

in a new era for renewable energy. 2005 2006 2007 2008 2009 advanced air quality control systems. In the nucle- These vastly different projects have one thing ar sector, we signed a terms sheet for design and in common—they are all part of Bechtel’s diverse Revenue construction of a new reactor in Maryland. In other in billions of U.S. dollars portfolio, which in 2009 again stood the company projects, we worked to increase generating capac- 35 in good stead. Solid performance distinguished our 31.4 ity at several plants and strengthened our position 30.8 business across the board as we helped customers 30 as a leader in steam generator replacements. 27.0 build roads and rail systems, airports, reineries 25 and gas processing plants, power plants, mines, Again in 2009, Bechtel was one of the top 20.5 and telecommunications networks while also man- service providers to the U.S. government. A signii- 20 18.1 aging important defense and energy work for the cant milestone came in state, where 15 U.S. government. work passed the halfway point on a huge plant that Although the value of new work that we booked will treat hazardous liquid waste at a former nucle- 10 fell to $20.3 billion from $35.0 billion in 2008—a ar production site. We also made good progress on 5 direct result of customer spending cutbacks in the projects to eliminate unused chemical weapons at 0 global recession—our revenue from ongoing work defense sites in and Kentucky.

was $30.8 billion, close to 2008’s record level. Our Mining & Metals unit kept busy last year 2005 2006 2007 2008 2009 Highlighting 2009 were a pair of new pro- despite a slump in commodity prices. In Austra- ject awards that showcase our global reach and lia, we have alumina reinery projects on both the our acumen in multiple industries. Bechtel will solar thermal power complex in the Mojave Desert. gas, and in , we completed a major reinery eastern and western coasts, and in New South be a key player on Crossrail, a new railway that We also invested in the project, underscoring our complex and an offshore gas development project. , we are expanding the world’s largest coal- will connect London to its eastern and western commitment to renewable energy sources and new Our Civil Infrastructure unit also had a good loading operation. We also have a strong presence suburbs. A Bechtel team will be responsible for technologies. year. In addition to the Crossrail award, we in , where we are engaged in several big cop- the 21-kilometer underground section beneath the Our Oil, Gas & Chemicals business unit led continued work on the modernization of three per projects. B E C H T E L city. The project continues a legacy of Bechtel rail the way again in 2009, working on a variety of historic lines of the . Work B E C H T E L REPORT work in the UK that in recent years has included projects around the world. In the United States, we progressed on modern motorways in Albania and All in all, 2009 was a good year, especially in REPORT 2 0 1 0 2 0 1 0 the nation’s irst high-speed rail line and the reno- continued to expand several major reineries and a Romania, and the stunning New International light of the economic turmoil that roiled every mar- 3 vation of its busiest rail corridor, stretching from big receiving terminal for liqueied natural gas, and Airport is taking shape in . In the United ket in which we work. In the following pages, you’ll 4 London to Scotland. we made good progress on the Canada-to-United States, excavation began for a major tunnel on a learn about many of the projects that contributed In California, we signed a landmark deal with States Keystone Pipeline. In Angola, work is well rail project that will link Washington, D.C., and its to our success. BrightSource Energy to construct a 440-megawatt along on a big processing plant for liqueied natural international airport. Trimble Power Plant Building a supercritical Global Highlights pulverized coal-ired power plant in Kentucky for London Louisville Gas and Electric. Underground Wood River Prairie State Oak Creek Edwardsport Part of a public-private Reinery Power Plant Power Plant IGCC plant Sammis Power Plant partnership modernizing Designing and Building one of the Constructing Building a coal-ired Modernizing air quality the Jubilee, Northern, building new process nation’s cleanest a supercritical facility for Duke control systems at a coal- and Piccadilly lines for units at an oil coal-ired power pulverized coal- Energy Indiana using ired power plant in Ohio for London Underground. reinery in for facilities in Illinois ired facility for integrated gasiication FirstEnergy. ConocoPhillips. for Peabody and a subsidiary of combined-cycle Naval Nuclear West Coast Route Romanian Khursaniyah eight public power Energy. technology. Propulsion Modernization Motorway Gas Plant Industrial City agencies. Managing atomic power Completed a project for Constructing a 415- Completed the irst Overseeing the Missile Defense Scotford Keystone laboratories in Network Rail to renovate kilometer motorway phase of a natural ongoing expansion Upgrader Pipeline Constructing and for the the busy rail corridor linking Brasov to the gas processing plant of Jubail Industrial Expanding a facility Managing build- installations in U.S. Department of Energy stretching from London Hungarian border for the in for City for the Saudi for Shell Canada out of a pipeline for and California for the and the Navy. to Scotland. Romanian government. Saudi Aramco. Arabian government. U.S. government’s to turn bitumen TransCanada to carry Ground-based from oil sands into crude oil from Canada Midcourse Defense crude oil. to U.S. markets. system.

Hanford Waste Watts Bar Power Plant Treatment Plant Completing construction of Building a facility for the Unit 2 at a nuclear generating U.S. Department of Energy station in for TVA. to treat hazardous waste at Metrorail Extension a former nuclear production Lawrence Livermore Building an extension of the site in Washington state. National Laboratory Metrorail for the Metropolitan Managing a national Washington Airports Authority. research institution in California for the U.S. Oak Ridge Kwajalein Department of Energy. Cleaning up the environment Test Range at the birthplace of the nuclear Managing a U.S. Ivanpah Solar age in Tennessee for the U.S. Department of Defense Power Complex Department of Energy. missile defense and Designing and building a satellite surveillance site. 440-megawatt solar thermal Wireless Deployment power complex in California for Developing and deploying high- BrightSource Energy. speed wireless services for Cox Worsley Reinery Communications. Increasing capacity of Chemical Weapons an alumina reinery and Elimination Albanian mine near Perth Eliminating chemical for BHP Billiton Worsley Uprates Motorway weapon stockpiles at U.S. Increasing capacities Building a 57-kilometer Alumina. Department of Defense Sandow at nuclear power , including a sites in Colorado and Power Plant stations for Florida 5.5-kilometer tunnel, Yarwun 2 Reinery Kentucky. Building a circulating Power & Light. for the Albanian Designing and building Pascagoula luidized bed, lignite- government. the second stage of Reinery Los Alamos ired power plant in an alumina reinery in Working for National Texas for Luminant for Laboratory Chevron on a major Energy. Angola Alcan. Managing a national revamping program LNG Plant research institution in at an oil reinery in Designing and Wireless New Mexico for the U.S. . Los Pelambres Mine Expansion building a natural gas Department of Energy. Increasing the capacity liquefaction plant for Assisting with the Sabine Pass of a copper mine in Angola LNG Limited. expansion and LNG Terminal the Chilean for improvement of Expanding a Antofagasta and two AT&T’s national liqueied natural gas Japanese consortiums. Port Waratah wireless network. receiving terminal New Doha Jamnagar KGD6 Gas Field B E C H T E L Coal Terminal in for International Reinery Completed a natural B E C H T E L Upgrading and increasing Motiva Airport REPORT Cheniere Energy. Los Bronces Mine Completed work in gas ield development REPORT the capacity of a coal- Reinery Working for the 2 0 1 0 Building a new concentrator India on a reinery off the east coast of 2 0 1 0 handling facility in New Expanding an oil government of Qatar at a copper mine in the for Reliance India for Reliance South Wales for Port reinery in Texas to construct an Chilean Andes for Anglo Industries. Industries. Waratah Coal Services. for Saudi Aramco airport capable of 5 American SUR S.A. 6 and Shell that will accommodating super be the largest in jumbo jets. the U.S. B E C H T E L B E C H T E L  | The Dulles Metrorail extension, REPORT REPORT 2 0Virginia, 1 0 USA 2 0 1 0 7 8 OIL, GAS, LNG, , AND PIPELINES

Oil, Gas & Chemicals

Bechtel’s Oil, Gas & Chemicals business performed well in all areas in 2009, once again setting the pace for the com- pany and reinforcing our leadership in the liqueied natural gas sector. In Angola, engineering is complete and early construc- tion has begun on a large LNG liquefaction plant. In south- ern Louisiana, we completed the irst stage of the Phase 2 expansion of a major terminal for receiving and regasifying LNG. Work began on front-end engineering and design for four new LNG facilities in —three in Queensland and one in Western Australia. In India, we completed two projects—the expansion of the massive Jamnagar export reinery complex on the west coast (which we originally completed in 2000) and the KGD6 offshore gas development in the Bay of Bengal. In Saudi Arabia, we completed the irst phase of the Khursani- yah gas plant near Jubail. We also continued to execute major projects in North America. The irst phase of the Keystone Pipeline is nearly complete, and engineering has started for an expansion pro- ject. The combined system will be able to transport more than 1 million barrels of crude oil per day from , Canada, to U.S. reineries in the South and the Midwest, including Wood River reinery in Illinois, where we are engi- neering and constructing new process units. Reinery expansion projects are progressing in Pas-

B E C H T E L  | Motiva reinery expansion, cagoula, Mississippi, for Chevron, and in Texas—where B E C H T E L REPORT Texas, USA REPORT 2 0 1 0 Motiva’s expanded Port Arthur facility will be the largest 2 0 1 0  | Wood River reinery reinery in the United States. In Alberta, Canada, work con- 9 expansion, Illinois, USA tinued on the Scotford project, which will convert oil sands 10 bitumen to crude oil.  | Khursaniyah gas plant, Saudi Arabia DEFENSE, SPACE, DEMILITARIZATION, ENERGY MANAGEMENT, AND ENVIRONMENTAL WORK

Government Services

In 2009, Bechtel again played a key role in both national security and large-scale environmental cleanup for the U.S. government. Our ability to tackle big, complex projects was exem- pliied at a former nuclear production site in Washington state, where construction passed the halfway point on a huge plant to convert highly radioactive liquid waste to a stable glass-like substance for safe and permanent storage. At U.S. defense sites in Colorado and Kentucky, work progressed on facilities designed to eliminate stored chemi- cal weapons dating back to World War II. In Tennessee, we began the second decade of environmental cleanup at Oak Ridge, the birthplace of the nuclear age. And in , we are managing the cleanup of hazardous waste from pluto- nium processing work during the Cold War. We continued to help manage and operate two pre- mier national laboratories in Livermore, California, and Los Alamos, New Mexico. The labs are more eficient and secure than ever before, making it easier for them to ensure the viability of the nation’s nuclear stockpile while also promoting breakthrough research in science. We also are managing the nation’s top atomic power laboratories in Pennsylvania and New York. The labs provide research and development for sys- tems and related services to the U.S. Navy.  | Hanford waste treatment facility, Washington state, USA Other important ongoing defense work included

B E C H T E L construction of missile ields in Alaska and silos in Cali- B E C H T E L REPORT REPORT 2 0 1 0 fornia for the Ground-based Midcourse Defense system, 2 0 1 0 and management of the missile test range on Kwajalein 11 Island in the South Paciic.  | Blue Grass chemical demilitarization, 12 Kentucky, USA

 | Los Alamos National Laboratory, New Mexico, USA FERROUS, NONFERROUS,  | Port Waratah coal terminal expansion, Australia PRECIOUS, AND LIGHT METALS, AS WELL AS INDUSTRIAL MATERIALS

Mining & Metals

Repeat work for satisied customers continued to be a Bechtel hallmark in 2009, especially for our Mining & Metals unit. Three current projects in Australia follow successful ear- lier jobs. In Queensland, we are building the second stage of an alumina reinery that we completed in 2004, more than doubling its production capacity. In New South Wales, we are expanding the world’s largest coal-loading terminal for the third time in a decade. And in Western Australia near Perth, we have returned to expand the Worsley alumina reinery and bauxite mine and construct a new mine. Another example of good work leading to more work can be found in the Andes of Chile, where Bechtel is engaged in its fourth project at the Los Pelambres copper mine. The current expansion will increase the mine’s capacity by more than 20 percent. We also are constructing a new copper concentrator at the Los Bronces mine in the Chilean Andes, at an altitude of more than 3,000 meters. Perhaps the most telling examples of repeat work are the new Hub we created with BHP Billiton to plan and execute coal and alumina projects, and our alliance with Xstrata on copper concentrator work. Bechtel was selected by these two multinational mining giants based on the consistency of our performance and the value added when we transfer hard-won expertise from project to project.

B E C H T E L In 2009 we also began work on the Ras Az Zawr alumi- B E C H T E L REPORT REPORT 2 0 1 0 num smelter in Saudi Arabia (our irst aluminum project in 2 0 1 0 that country), following successful smelter projects in Oman 13 and Bahrain. 14

 | Los Bronces copper mine expansion, Chile

 | Worsley alumina expansion, Australia RAIL SYSTEMS, ROADS, , TUNNELS, AIRPORTS, AND PORTS

Civil Infrastructure

Bechtel’s Civil Infrastructure unit turned in another strong performance in 2009, with solid execution on projects in , the , the , and the United States. In the UK, we wrapped up the modern- ization of the West Coast Main Line, a rail corridor stretching from London to Scotland. In London a Bechtel public-private partnership continued its project to renovate three lines of the Underground. We also added to our rail portfolio in the UK with two major project awards. A Bechtel team will be responsible for a 21-kilometer tunnel beneath London—the centerpiece of Crossrail, a new railway linking the city to its eastern and western suburbs. Bechtel also will perform work on Network Rail’s portion of Crossrail, upgrad- ing track and renovating the busy Reading station. In the United States, construction began on an exten- sion of the Metrorail line that will permit seamless rail travel between Washington, D.C., and Dulles International Airport. The project reached its irst major milestone in October, when excavation began on a tunnel under Tysons Corner, . In Eastern Europe, work continued on new highways in Albania and Romania that are expected to help spur eco-

B E C H T E L nomic growth and tourism. The Albanian project, featuring a B E C H T E L REPORT REPORT 2 0 1 0 5.5-kilometer twin-bore tunnel and 27 bridges in a moun- 2 0 1 0 tainous region, is set for completion in 2010. 15 In the Middle East, we made progress on the huge New 16  | London Underground modernization Doha International Airport in Qatar—one of the irst facilities

 | Dulles Metrorail extension, designed for super jumbo jets—and the Khalifa Port and Virginia, USA Industrial Zone in the .

 | Albanian Motorway ELECTRIC POWER GENERATION USING FOSSIL AND NUCLEAR FUELS, RENEWABLE SOURCES, AND NEW TECHNOLOGY, AND TELECOMMUNICATIONS NETWORKS Power

In 2009, Bechtel’s work reinforced our longstanding leader- ship in fossil and nuclear power generation while placing us in the forefront of the move toward renewable energy and new technology. Highlighting the year was the award of a contract to design and build a 440-megawatt solar thermal power complex for BrightSource Energy, an innovative company leading the way in this exciting ield. The project, located in California’s Mojave Desert, will be among the largest of its kind in the world. Technology also is key to designing cleaner, more efi- cient fossil fuel plants. In Indiana, work is progressing on what will be the largest coal-ired plant employing integrated gasiication combined-cycle (IGCC) technology to dramati- cally reduce emissions. Plants under construction in Illinois and Kentucky feature advanced air quality control systems, and in Ohio, the environmental retroit of the Sammis plant is heading toward completion. In eastern Wisconsin, work is nearly complete on a 1,230-megawatt coal-ired plant. Bechtel underscored its prominence in nuclear power by extending the life cycles of some aging plants, modernizing others, and helping to develop the next generation of clean, eficient plants. The year featured the signing of a terms  | BrightSource Energy’s sheet for the design and construction of Calvert Cliffs 3 in innovative technology Maryland—one of the irst new nuclear plants in a quarter of a century. We are working on the completion of Watts Bar  | San Onofre steam generator B E C H T E L replacement, California, USA Unit 2 in Tennessee and on a program to increase the power B E C H T E L REPORT capacities of two nuclear facilities in Florida and one in REPORT 2 0 1 0 2 0 1 0  | IGCC power plant, Wisconsin. We also are replacing aging steam generators at Indiana, USA 17 plants in California, Florida, and Ohio. 18  | Prairie State Energy Campus, Illinois, USA

B E C H T E L B E C H T E L REPORT REPORT 2 0 1 0 2 0 1 0 19 20 Vision + Values VALUES

Building on a family heritage that spans more than 110 years, we will VISION continue to be privately owned by active management and guided by To be the world’s premier irmly held values.

engineering, construction, and Ethics. Uncompromising integrity, project management company. honesty, and fairness are the heart of our company.

 Customers and partners will Excellence. We set high standards. see us as integral to their We apply advanced technology, and we continually innovate and success. We will anticipate improve. We thrive on challenge and their needs and deliver on every accomplishment. commitment we make. Fair Return. We earn a return that fairly rewards the value we deliver.

Mutual Respect. We work by our  People will be proud to work Bechtel Covenants, which encourage at Bechtel. We will create openness, teamwork, and trust. We opportunities to achieve the value an inclusive culture based on diverse backgrounds, experience, extraordinary, and we will and views. reward success. Safety. Zero accidents is our unwavering goal—people’s lives

 Communities will regard depend on it.

us as responsible—and Sustainability. We plan and act for responsive . We will integrate the future—for the long-term good of our company, our customers, and global and local perspectives, our world. B E C H T E L B E C H T E L REPORT REPORT 2 0 1 0 promote sound management of 2 0 1 0 21 resources, and contribute to a 22 better quality of life.

 | New Doha International Airport, Qatar Leadership

Riley Bechtel Chairman and Chief Executive Officer OIL, GAS & CHEMICALS EPC MANAGEMENT BOARD OF DIRECTORS, BECHTEL GROUP, INC. Jim Jackson Bill Dudley John MacDonald President Engineering, , and Mike Adams President and Construction Functions Chief Operating Officer Jim Illich President, Civil Pipeline and Offshore Don Armstrong Riley Bechtel Adrian Zaccaria Manuel Junco Project Controls Chairman and Chief Executive Officer Vice Chairman Downstream Rick Astleford Quality and Six Sigma Steve Bechtel, Jr. Peter Dawson POWER Chairman, Retired Chief Financial Officer Kevin Berg Jack Futcher Environmental Safety Leigh Clifford AO President Michael Bailey and Health Services Chairman, Qantas Airways Alasdair Cathcart Limited, and former CEO, General Counsel David Hammerle Rio Tinto Group Fossil Power Contracts and Procurement Alan Dachs Ian Copeland Tony Indico President and CEO, Renewables and New Startup Fremont Group Technology BUSINESS UNITS Dick McIlhattan Peter Dawson Carl Rau Project Management Chief Financial Officer BECHTEL SYSTEMS & Nuclear Power INFRASTRUCTURE, INC. Tom Patterson Bill Dudley Toby Seay Engineering President and Scott Ogilvie Communications and Chief Operating Officer President Transmission Carl Strock David Walker Construction Bob Joss Bechtel National, Inc. REGIONS Professor of Finance and former OTHER MANAGEMENT Dean of the Graduate School of Business, Stanford University CIVIL PACIFIC Eric Grenfell John MacDonald Mike Adams Steve Katzman Bechtel Enterprises, Inc. Manager of HR and EPC President President Susan Kubanis Functions Walker Kimball EUROPE, MIDDLE EAST, Sustainability Services Nick Moore Aviation and Infrastructure AFRICA & SOUTHWEST ASIA John MacDonald Former Global Chairman, PricewaterhouseCoopers Tom McCarthy Human Resources Rail President Lorne Parker Scott Ogilvie President, Bechtel Systems and MINING & METALS LATIN AMERICA Risk Management B E C H T E L Infrastructure, Inc. REPORT Andy Greig Jim Haynes Geir Ramleth 2 0 1 0 Dave O’Reilly President President Information Systems and Former Chairman and CEO, Technology Chevron 23 Anette Sparks Dan Warmenhoven Controller and Business Chairman and former CEO, Services NetApp Charlene Wheeless Adrian Zaccaria Corporate Affairs Vice Chairman

 | Scotford Upgrader, Alberta, Canada As of March 2010 Major offices in

✒ risbane

Calgary

Frederick, Md.

Houston

London

Montreal

New Delhi

San Francisco

Santiago

Shanghai

Taipei

For more information about Bechtel and its projects, visit bechtel.com