Billion Dollar Shouaiba Tender Request First Out for Saudi's Four Fast Track Power and Water Projects

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Saudi Arabian government agencies and utility development bodies are planning to have put an extra 20,000 MW of electrical power generating capacity in place by 2010, which will almost double present capacity to around 45,000 MW. The projected cost of this drive for power is something over $30 billion. The estimated annual growth rate for power demand over the period is currently put at 6%.

Integral with this target is the plan to construct ten new independent power and water projects (IWPPs) adding 10,000 MW capacity, at a cost of around $16 billion. Four of these IWPPS are scheduled for completion by 2009. The first, and long awaited Request for Proposals (RFP) on these projects has now been issued to eleven pre-qualified groups. It is for the $1.6 billion Shouaiba IWPP, which will be closed on January 8, 2005. The plant site is south of Jeddah.

The project will have an installed capacity of 650 to 900 MW and a water desalination capacity of over 800 million liters per day. Completion date for the project is scheduled for 2007, and all major agreements are to be signed by the middle of 2005.

International project developers, such as Mitsui (Japan), Itochu (Japan), AES Oasis (Dubai) and UWEC (UAE), will be competing with six groups that include local Saudi companies in the consortia. The winners will be offered a 60% stake in a special purpose company, with the balance splitting 32% for the Public Investment Fund, and 8% to the Saudi Electricity Company (SEC). The new company will hold a 20-year power and water purchase agreement, with the SEC's Water and Electricity Company and the Saline Water Conversion Company (SWCC).

Another RFP is expected later this year for an IWPP in Jubail planned by Marafiq, the power and water utilities company set up in 1999 to service the needs of Jubail and Yanbu. This project has a planned first phase capacity of 1,500 MW (rising to 2,400 MW in the second phase) and a desalinated water capacity of 800 million liters per day. The two other projects due for fast track treatment are the $400 million Shuqaiy IWPP, with a capacity of 700 MW and 109 million liters of water per day and the $2.4 billion Raz Azzour IWPP, which will have a 2,500 MW generating and 800 million liters per day water capacity.

Among a wide range of power expansion projects in Saudi Arabia is the SEC's project to extend the generation capacity of the existing power plant at Shouaiba. Alstom (Paris, France) is leading the EPC contract consortium for the project that includes the construction of three new 350 MW turbines. The project was originally planned as a key element in Saudi Arabia's gas initiative, which has now been abandoned. The $1 billion project will make the power plant the largest in the Middle East, at 4,000 MW, if a further three units are added after the first new unit comes into operation in mid-2006.

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