Saudi Arabia’s Modon plans $2.7bn of infrastructure
30 May 2023
The Saudi Authority for Industrial Cities & Technology Zones (Modon) is expanding the infrastructure at its industrial cities and facilities across the kingdom as it seeks to attract increased private sector investment.
The estimated SR10bn ($2.7bn) five-year plan comprises several main elements.
The largest, worth SR5.8bn, covers the construction of multiple roads, bridges, water and electricity networks and other associated facilities to provide base infrastructure services.
Examples include the construction of a bridge linking the main highway system with Jeddah’s second industrial city, and a new rainwater collection network at the Waad al-Shamal industrial complex in the far north.
The second component is worth about SR2.1bn and involves building works such as new fire stations, ready-to-lease warehouses, office buildings and storage areas.
The final element involves the construction of transmission and distribution systems, including a high-voltage substation in Sudair and new overhead lines to serve Al-Kharj industrial city, in a programme worth about SR1.8bn.
Modon operates 31 industrial cities across the kingdom, including three each in Riyadh, Dammam and Jeddah. It also has four ‘oases’ under its remit where only women can work, and provides basic infrastructure services to more than a dozen private industrial cities.
Its mandate additionally covers Riyadh Technology Valley, Al-Raidah Digital City and the Wadi Makkah Technological Complex.
MEED's latest special report on Saudi Arabia includes:
> GIGAPROJECTS: Saudi Arabia under project pressure
> ECONOMY: Riyadh steps up the Vision 2030 tempo
> CONSTRUCTION: Saudi construction project ramp-up accelerates
> UPSTREAM: Aramco slated to escalate upstream spending
> DOWNSTREAM: Petchems ambitions define Saudi downstream
> POWER: Saudi Arabia reinvigorates power sector
> WATER: Saudi water begins next growth phase
> BANKING: Saudi banks bid to keep ahead of the pack
> DATABANK: Riyadh holds its buoyant economic heading
Exclusive from Meed
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Firms prepare Oman wind IPP bids
5 November 2024
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Saudi Arabia starts independent energy storage prequalifications
5 November 2024
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Alba changes Line 7 expansion plans
5 November 2024
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Gayal wind bidders await Neom feedback
5 November 2024
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Saudi Arabia to announce Remah and Nairiyah results imminently
4 November 2024
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Firms prepare Oman wind IPP bids
5 November 2024
Prequalified bidders are considering partners and their plans to bid for the contracts to develop and operate two of five planned wind independent power producer (IPP) projects in Oman.
Oman's Nama Power & Water Procurement Company (Nama PWP) prequalified companies that can bid for the contracts to develop and operate five wind IPPs, which will have a maximum total combined capacity of about 1,006MW, in September.
The same month, it issued the request for proposals for the contracts to develop the Jalan Bani Bu Ali wind IPP, which is one of the three schemes that will cater to Oman's Main Interconnection System (MIS); and Dhofar 2 wind IPP, which will cater to the smaller Dhofar Power System (DPS).
Nama PWP expects to receive bids for the two contracts in early February 2025.
The Jalan Bani Bu Ali wind IPP, located in South Sharqiyah Governate, will have a capacity of 91MW-105MW and has a commercial operation target of Q1 2027.
Adjacent to the existing Dhofar Wind 1 IPP in Shaleem and Al-Hallaniyat Islands in Dhofar Governate, the Dhofar 2 wind plant will have a capacity of 114MW-132MW and will be operational in Q2 2027.
The developers that have been prequalified to bid for the five wind IPP schemes are:
- Acwa Power (Saudi Arabia)
- Sembcorp (Singapore)
- Sumitomo (Japan)
- TotalEnergies (France)
- Masdar (UAE)
- Alfanar (Saudi Arabia)
- EDF Renewables (France)
- Elecnor (Spain)
- Goldwind (China)
- GED / Marafiq (Saudi Arabia)
- Hero Asia Investment (Hong Kong)
- Itochu (Japan)
The remaining three wind farms will be tendered separately, according to a source familiar with the projects.
The remaining two projects catering to the MIS are:
- Duqm Wind IPP: Located in Ras Madrakah in Duqm, the project will have a capacity of 234MW-270MW, with commercial operations expected in Q4 2027
- Mahoot Wind 1 IPP: Located in Mahoot in Al-Wusta Governate, the wind farm will have a capacity of 342MW-400MW, with a commercial operation target of Q4 2027
The other wind farm catering to the DPS is the Sadah wind IPP. Located in Sadah in Dhofar Governate, it will have a capacity of 81MW-99MW and is due for commercial operation in Q4 2027.
Nama PWP, previously Oman Power & Water Procurement Company, appointed KPMG Lower Gulf as the financial adviser, UK/US-headquartered Dentons as the legal adviser and Australia’s Worley as the technical adviser for the wind IPPs.
Renewable energy, mainly derived from solar photovoltaic power plants, accounted for an estimated 6% of Oman’s electricity production capacity as of 2023.
Longer-term, Oman aims to reach net-zero carbon emissions by 2050.
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Saudi Arabia starts independent energy storage prequalifications
5 November 2024
Principal buyer Saudi Power Procurement Company (SPPC) has invited companies to prequalify for the first group of battery energy storage system (bess) projects to be tendered under a build-own-operate (BOO) model in Saudi Arabia.
The group one bess – also called independent storage provider (ISP) – projects will comprise the following schemes with a total combined capacity of 2,000MW, which equates to about four hours or 8,000 megawatt-hours (MWh) of storage:
- Al-Muwyah bess ISP: 500MW (Mecca)
- Haden bess ISP: 500MW (Mecca)
- Al-Khushaybi bess ISP: 500MW (Qassim)
- Al-Kahafa bess ISP: 500MW (Hail)
Each project will be developed under a BOO model with the successful bidder holding 100% equity in the special purpose vehicle (SPV) set up to develop and operate each ISP.
The SPVs will enter into a 15-year storage services agreement with the principal buyer.
According to SPPC, the newly launched energy storage programme enables reaching 50% of renewable energy in the kingdom’s energy mix by 2030 while enhancing the reliability and resilience of the electric power system.
MEED reported in May this year that SPPC was several months away from seeking interest from developers for the contract to develop and operate the 2,000MW first phase of an energy storage system catering to kingdom's electricity grid.
It is understood that SPPC plans to procure up to 10,000MW of bess capacity by 2030.
The principal buyer conducted a market-sounding event for the project in December 2023, in line with a plan to launch the procurement process for one-fifth of this capacity this year.
The planned bess facilities are to be built near demand centres. They will boost the electricity grid's spinning reserves as more renewable energy enters its electricity production mix.
Bess comprises rechargeable batteries that can store and discharge energy from various sources when needed. It is one of the key solutions being considered to address the intermittency of renewable energy sources.
US/India-based Synergy Consulting is advising SPPC on the energy storage capacity procurement programme.
Growing renewable capacity
Saudi Arabia, through SPPC, publicly tendered about 10,370MW of renewable energy capacity under the first five rounds of the National Renewable Energy Programme (NREP) between 2017 and 2023.
Solar photovoltaic (PV) independent power projects (IPPs) account for 79% of the total tendered capacity, or about 8,170MW. Wind IPPs account for the remaining capacity.
At least four of the awarded schemes are now operational: the 300MW Sakaka solar PV, the 400MW Dumat Al-Jandal wind, the 300MW Rabigh solar and the 300MW Saad solar IPP projects.
Another scheme, the 1,500MW Sudair solar farm, procured by the Public Investment Fund under the Price Discovery Scheme and directly negotiated with Saudi utility provider Acwa Power, is also operational.
The prequalification process is under way for wind and solar IPPs with a total combined capacity of 4,500MW under the sixth round of the NREP.
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Alba changes Line 7 expansion plans
5 November 2024
Aluminium Bahrain (Alba) has changed its capacity expansion plans. Instead of building a new Line 7, the aluminium producer now plans to install new production facilities to replace the existing lines 1, 2 and 3.
“Now, the intention is to demolish or stop the old lines, which are efficient from 1971. They are more than 50 years-plus, and we will replace them with new lines. Technically, this is not a new Line 7 project anymore because we are going to close lines 1, 2 and 3,” Alba CEO Ali Al-Baqali told MEED on the sidelines of the Gateway Gulf investor forum in Manama on 4 November.
The feasibility study for the project has already started and is being executed by US firm Bechtel. One of the key challenges is mitigating the drop in Alba's overall capacity while the new production facilities are built.
In 2022, Bechtel was appointed to conduct a feasibility study for Line 7. The firm was also the contractor for Line 6, which was commissioned in 2019.
Replacing lines 1, 2 and 3 will allow Alba to increase capacity by installing more efficient, modern production plants, while at the same time utilising existing assets at the Alba site in Bahrain.
“There is no need for power because we are going to utilise the same power,” Al-Baqali said. “We also do not need a new cast house.”
Alba is the world’s largest single-site aluminium smelter outside of China. In 2023, it set a new record with 1,620,665 metric tonnes of production, an increase of 1.3% when compared to 2022.
The plan to replace lines 1, 2 and 3 is separate from plans to enhance the capacity of lines 4 and 5. In September this year, the Alba board approved an estimated $30m project known as Lines 4-5 Creep-up that is expected to increase Alba’s metals production capacity by 8,000 metric tonnes a year (t/y) upon completion.
Alba made two announcements on 3 November at the Gateway Gulf 2024 investment forum hosted by the Bahrain Economic Development Board (Bahrain EDB) in Manama. The announcements were made amid a series of important changes for the company.
Alba and Japan's Daiki Aluminium Industry Company will form a joint venture known as Alba-Daiki Sustainable Solutions (ADSS) to develop an aluminium dross processing facility in Bahrain. Alba will hold a 70% stake in the joint venture. Daiki will own the remaining 30%. Both partners intend for the aluminium dross plant to commence operations by September 2026.
Alba and Bahrain-based Array Innovation also announced plans to accelerate Alba's Industry 4.0 digitalisation journey with advanced artificial intelligence, data analytics and automation solutions to optimise Alba's operations and boost efficiencies.
Alba has made several key announcements in recent months. The most significant was on 24 October, when it informed the Bahrain Bourse, where it is listed, that it had appointed advisors to guide its due diligence process as it explores a potential business combination with Saudi Arabian Mining Company (Maaden).
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Gayal wind bidders await Neom feedback
5 November 2024
The engineering, procurement and construction (EPC) companies that submitted proposals in what could be the final bidding round for the contract to build a 1,200MW wind farm catering to the Neom gigaproject in Saudi Arabia expect to hear from the project client.
It is the third round of proposals for the Gayal wind project, following the submission of initial bids on 4 March and the best and final offers for the contract in June.
Neom’s energy, water and hydrogen subsidiary, Enowa, requested that the final bidders submit updated proposals for the Gayal wind farm contract, MEED reported in September.
It is understood that the final bidders submitted their "option offer" in October. This offer entails tapping an original equipment manufacturer (OEM) different from that named in the final offer, according to a source.
It is understood that PowerChina and Egyptian contractor Orascom are among the firms invited to bid for the Gayal wind farm EPC contract.
The project site is approximately 35 kilometres northwest of the former town of Gayal.
The project will have an estimated plot area of 164 square kilometres. The project duration is 31 months from the start of construction.
The scope of work for the EPC contractors bidding for the scheme includes the design, supply and installation of wind turbine generators and foundations, three 380kV substations and control systems, meteorological towers, site roads, hard stands, crane pads and associated infrastructure.
Enowa received bids for another renewable energy project, the 800MW Shiqri solar farm, in March. The client is conducting commercial clarifications for the solar project, MEED reported in May.
Neom aims to be powered 100% by renewable energy by 2030.
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Saudi Arabia to announce Remah and Nairiyah results imminently
4 November 2024
Principal buyer Saudi Power Procurement Company (SPPC) is expected to imminently announce the bid results for the contracts to develop and operate four combined-cycle gas turbine (CCGT) power generation plants in Saudi Arabia with a total combined capacity of 7.2GW.
Two consortiums submitted bids for the contracts on 21 August, as MEED reported.
The four independent power producer (IPP) projects, each with a generation capacity of 1,800MW, are:
- Remah 1
- Remah 2
- Al-Nairiyah 1
- Al-Nairiyah 2
Remah 1 and 2, previously known as PP15, will be located in Saudi Arabia’s Central Region, while Al-Nairiyah 1 and 2 will be in the Eastern Region.
According to a source close to the projects, the teams that submitted bids to develop and operate these projects are:
- Abu Dhabi National Energy Company (Taqa, UAE) / Jera (Japan)
- Acwa Power (local) / Korea Electric Power Corporation (Kepco, South Korea) / Saudi Electricity Company (SEC, local)
"There was an expectation that an announcement regarding the bid results was to be made on 31 October. Since that did not happen, the expectation is an announcement could be made before the end of this week," a source close to the project told MEED.
SPPC previously indicated that the four power plants will operate using natural gas combined-cycle technology with a carbon-capture unit readiness provision.
The four power generation facilities will be developed using a build-own-operate (BOO) model.
SPPC’s transaction advisory team for the Remah 1 and 2 and Al-Nairiyah 1 and 2 IPP projects comprises US/India-based Synergy Consulting, Germany’s Fichtner and US-headquartered Baker McKenzie.
As MEED previously reported, SPPC has also started preparing for the next batch of gas-fired IPPs that it plans to tender.
The principal buyer is understood to have received bids for the financial, legal and technical consultancy roles for the Al-Rais and Riyadh 16 IPPs. The Al-Rais IPP will have a capacity of 2,400MW, while the Riyadh 16 IPP has a planned capacity of 3,600MW.
Awarded gas IPPs
SPPC awarded contracts to develop four gas-fired power generation IPP projects last year.
A consortium comprising Saudi Electricity Company and Acwa Power signed the 25-year power-purchase agreements with SPPC to develop and operate the Qassim 1 and Taiba 1 IPP projects on 13 November 2023. Each plant has a capacity of 1,800MW. The two projects are valued at SR14.6bn ($3.9bn).
China’s Sepco 3 will undertake the engineering, procurement and construction contract for the two projects, while US-based GE will supply the CCGT for the power plants.
A team comprising Jomaih Energy & Water, France’s EDF and the local Buhur for Investment won the contract to develop the 1,800MW Taiba 2 IPP and 1,800MW Qassim 2 IPP schemes.
Each project will be developed on a BOO basis by the winning consortiums, which will be 100% owned by the successful bidders.
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