The developer of a planned $250 million seawater air-conditioning system that will serve businesses in downtown Hono­lulu has hired Hawaiian Dredging and Construction Co. and a mainland company to install the underground pipe system for the proj­ect.

Honolulu Seawater Air Conditioning LLC is on track to break ground on the proj­ect by the end of this year and have it operational by 2014.

Hawaiian Dredging, the state’s largest general contractor, will team up with Oregon-based James W. Fowler Co. to lay the pipe beneath downtown streets that will deliver the chilled water to individual buildings. The companies will use a variety of techniques to minimize traffic disturbances and avoid existing utilities, said Eric Masu­tomi, HSWAC chief executive officer.

James W. Fowler Co. was chosen for its experience using trenchless tunneling techniques, while Hawaiian Dredging brings a long history of experience in Hawaii’s construction industry, Masu­tomi said.

The project will generate more than $200 million in construction spending and create about 900 construction jobs.

Cold water will be pumped from a depth of 1,700 feet off the Kakaako shoreline and passed through a heat exchanger to create a closed loop of chilled fresh water delivered to customers’ buildings.

By using cold seawater instead of electricity to chill the freshwater loop, the system will save an estimated 77 million kilowatt-hours of power a year, according to the company’s website. That will eliminate the need to burn 178,000 barrels of oil a year for electricity generation. It also reduces potable water consumption for air conditioning by more than 260 million gallons and avoids emission of 84,000 tons of carbon dioxide — the equivalent of removing 15,000 cars from the road — each year.