Saudi Arabia to award 7.2GW Marjan, Hajr and PP12 contracts
8 November 2024
Saudi Power Procurement Company (SPPC) is expected to award the contracts to develop and build three greenfield thermal power plants with a total combined capacity of 7,200MW by the end of November.
The power plants will be sited at existing power complexes in Hajr, Marjan and Riyadh and will be separate from the ongoing independent power projects (IPPs) being publicly tendered.
The expansion project for Riyadh Power Plant 12 (PP12) will have a generation capacity of 1,800MW.
A project company formed by Saudi Electricity Company (SEC) will develop the project along with a team of China-headquartered Sepco 3 and South Korea’s Doosan Enerbility, which will undertake the project’s engineering, procurement and construction (EPC) contract, according to industry sources.
Saudi utility developer and investor Acwa Power will develop the expansion projects for Hajr and Marjan, which have respective capacities of 3,600MW and 1,800MW.
It is suggested, but not confirmed, that Sepco 3 will also undertake the EPC contract for both schemes.
Saudi-listed Acwa Power has yet to confirm or announce the new projects.
One of the sources said construction works on these expansion projects could begin by early 2025.
Original power plants
Based on MEED archives, the local Saudi Arabian Bemco signed a SR4.7bn ($1.27bn) contract with SEC to build the original 2,175MW Riyadh PP12 plant in May 2012.
The US’ GE supplied eight gas turbines for Riyadh PP12, for which it signed an estimated $141m services and maintenance contract in 2017.
Acwa Power and its partners developed the original Hajr IPP, which became operational in 2015.
It has a capacity of 3,927MW. The 20-year build, own and operate contract is valued at $2.7bn. South Korea’s Samsung C&T was the project’s EPC contractor.
Raft of gas-fired power plants
The three power plants bring the number of major gas-fired power generation facilities being built or about to begin construction in the kingdom to 15. They have a total combined capacity of roughly 30,500MW, excluding the cogeneration plants being developed for Saudi Aramco.
A team of Egypt’s Elsewedy Electric and Germany’s SIemens Energy is building a 1,200MW plant in Rabigh.
In September, MEED reported that SEC had issued limited notices to proceed to contractors for the following gas-fired plants, which are located in the kingdom’s Eastern Province:
- Qurayyah
- Ghazlan 1
- Ghazlan 2
A team comprising Egypt’s Orascom Construction and Spain’s Tecnicas Reunidas received a limited notice to proceed for the contracts to build a 3,600MW power plant in Qurayyah and a second plant, the 2,900MW Ghazlan 2 project, sources familiar with the projects said.
In addition, the contract to build a new power plant next to Ghazlan 1, which will have a capacity of 2,400MW, is understood to have been awarded to Energy China.
MEED understands that the power plants will be developed on a turnkey EPC basis.
On 7 November, SPPC announced the winning bidders for the contracts to develop four CCGT plants in Riyadh and the Eastern Region.
A consortium comprising SEC, Acwa Power and South Korea’s Korea Electric Power Corporation (Kepco) won the contract to develop and operate the Remah 1 and Nairiyah 1 IPPs, which each have a capacity of 1,800MW.
A second consortium comprising the UAE-based Abu Dhabi National Energy Company (Taqa), Japan’s Jera Company and the local Albawani Company successfully bid for the contract to develop and operate the similarly configured Remah 2 and Nairiyah 2 IPPs.
Construction work is under way for four IPPs that SPPC awarded last year. Taiba 1 and 2 and Qassim 1 and 2 will have a combined capacity of 7,200MW.
Experts say 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 kingdom’s gas-fired capacity.
Saudi Arabia envisages that renewable energy sources will account for half of its installed electricity generation capacity by 2030.
SPPC previously indicated that the plants it has tendered and awarded will operate using natural gas combined-cycle technology with a carbon-capture unit readiness provision.
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