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China Energy wins Ghazlan power plant expansion contract

21 April 2025

Saudi Electricity Company (SEC) is understood to have formally awarded China Energy International Group, a subsidiary of Beijing-headquartered China Energy Engineering Corporation, a contract to build a gas-fired power plant in Ghazlan.

The Ghazlan power plant is located on the Gulf coast, 20 kilometres northeast of Ras Tanura and 80 kilometres north of Dammam in Saudi Arabia's Eastern Province.

As part of the contract, China Energy will expand the existing power plant by adding approximately 1,600MW on an engineering, procurement and construction (EPC) basis, according to a local media report.

The award follows the signing of another EPC contract last month between SEC and a team of Chinese and South Korean contractors to expand Riyadh Power Plant 12 (PP12).

MEED reported in September last year that companies had received limited notices to proceed from SEC for several gas-fired power plant expansions in the kingdom.

These include contracts to expand Ghazlan 2 and Qurayyah, in addition to Ghazlan 1.

China-headquartered Shandong Electric Power Construction No. 3 Company (Sepco 3) and South Korea's Doosan Enerbility formally signed the EPC contract with SEC to expand PP12 in March. 

The expansion project comprises a greenfield combined-cycle gas turbine (CCGT) power generation plant with a capacity of 1,800MW.

In the same month, Hajr Two Electricity Company, a consortium of Saudi utility developer and investor Acwa Power, SEC and Haji Abdullah Alireza & Company (Haaco), awarded a joint venture of Egypt's Orascom Construction and Madrid-based Tecnicas Reunidas an EPC contract for the Qurayyah independent power producer (IPP) expansion project in Saudi Arabia.

The 50:50 joint venture will build the 3,010MW combined-cycle gas-fired power plant in the Eastern Province of Saudi Arabia.

The EPC contract is valued at more than $2.6bn, Orascom said.

30GW booking

According to industry sources, SEC had booked in advance 30GW of gas turbine capacity with the industry's leading original equipment manufacturers in anticipation of domestic and overseas demand for gas-fired generation power plants.

Experts also say that Saudi Arabia's liquid fuel displacement programme and the need to increase the flexibility of its electricity grid to accommodate more renewable power underpin moves to expand the state utility's gas-fired capacity. 

Saudi Arabia envisages that renewable energy sources will account for half of its installed electricity generation capacity by 2030.

MEED’s April 2025 report on Saudi Arabia includes:

> GOVERNMENT: Riyadh takes the diplomatic initiative
> ECONOMY: Saudi Arabia’s non-oil economy forges onward
> BANKING: Saudi banks work to keep pace with credit expansion
> UPSTREAM: Saudi oil and gas spending to surpass 2024 level
> DOWNSTREAM: Aramco’s recalibrated chemical goals reflect realism
> POWER: Saudi power sector enters busiest year
> WATER: Saudi water contracts set another annual record
> CONSTRUCTION: Reprioritisation underpins Saudi construction
> TRANSPORT: Riyadh pushes ahead with infrastructure development
> DATABANK: Saudi Arabia’s growth trend heads up

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Jennifer Aguinaldo

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