Saudi Electricity Company to build gas fired power plant

Sep 22, 2011 12:00 AM

Saudi Electricity Company (SEC) has signed a deal to build a 4,000 MW gas fired power plant aimed at keeping up with rapidly rising power demand.
The giant gas plant near Khobar will burn 600 mm cfpd of natural gas, said Amer Al-Swaha, head of Independent Power Projects (IPP) at SEC.

The $ 2.85 bn power plant deal, signed with a consortium led by Saudi Acwa Power Projects and including South Korea's Samsung C&T, combines two plant project phases.
Al-Qurayyah, south of the eastern city of Khobar, which had been planned in two parts, IPP1 and IPP2, is the third of five now planned (IPP) that will add a total of around 11,000 MW of capacity.

Saudi Arabia is struggling to find enough gas to meet rampant demand for energy in the kingdom, but the huge plant will not increase Saudi Arabia's gas burning by 600 mm cfpd as older plants will be retired.
“The fuel will be natural gas and part of it will come from the old, retired gas-fired power plants which are already more than 35 or 40 years old and will be shut down and the allocated gas will be diverted to this power plant,” Ali bin Saleh al-Barrak, CEO of the Saudi Electricity Co, said.

Under the deal, Saudi Electricity will buy all the power produced by the plant for 20 years for 7 halalas per kilowatt hour from the consortium that will run it on a build-own-operate basis.
Crude oil accounts for 40 % of the fuel Saudi Electricity burns to generate power, while gas contributes 34 %, diesel 22 % and fuel oil 4 %, according to 2010 data from the Saudi Arabia's Electricity and Co-generation Regulatory Authority (ECRA).

The plant, which will be one of the biggest IPP combined cycle gas-fired power plant in the world, is expected to start production before the summer of 2014. It will have an efficiency rate of around 52 %.
Germany's Siemens will provide equipment while Samsung C&T will be the engineering, procurement and construction contractor. The project will be 77 %-financed by debt, Acwa, the lead developer, said.

Demand for power in the kingdom is growing 8 % annually, Saudi minister of water and power, Abdullah al-Hussayen said in a speech at the same event, but it rose more than 12 % this summer.
Government officials say demand for power could triple to 120 GW by 2030. Saudi Electricity alone is spending $ 80 bn in a 10-year investment plan to 2018 to add around 30 GW of capacity to the 51 GW now.

“We need 3.5 GW every year to meet the demand,” SEC chief Al-Barrak told.
Acwa chairman Mohammed Abunayyan said the massive projects could be financed without problems.
“Financing is there, around 50 % of the financing will come from Saudi banks and 50 % from international institutions,” he said at the signing ceremony in the Saudi Arabian capital.

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