Doosan Heavy Industries Wins $1.04 Billion Contract for Saudi Arabia's Qurayyah Power Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Doosan Heavy Industries and Construction Company (SEO:034020) (Gyeongsahngnam-Do, South Korea) has won a $1.04 billion contract to construct a thermal power plant in Saudi Arabia. A notice of award was recently delivered to Doosan, and the contract will be signed in October this year.

According to the terms of the deal, Doosan will be involved in the construction of the 1,330-megawatt (MW) (5 x 266 MW) Qurayyah combined-cycle thermal power plant, close to the city of Ad Dammam in Eastern Arabia. Doosan also will provide plant equipment, including heat-recovery steam generators and steam turbines required for the venture.

Upon completion in February 2013, the Qurayyah power plant, including other power-generating facilities under construction at the site, will be part of the largest single-location power plant complex in Saudi Arabia, with a total generation capacity of 3,190 MW. The complex will cater to the eastern and central regions of the country, as well as the Al Jubail Industrial Complex.

Doosan, along with local construction partner Arabian Bemco Contracting Company Limited (Jeddah, Saudi Arabia), is reported to have tendered the lowest bid for the power project in July 2009. Bemco is a turnkey engineering, procurement and construction (EPC) contractor in the power and industrial segments, involved in several projects in the domestic Arabian terrain. Established in 1965, the company has honed its integrated capabilities across all stages of segment-specific project life cycles, ranging from EPC to fabrication, startup and commissioning. Bemco's processes follow strict quality criteria and are ISO 9001-compliant. Comprising three business units focused on industry, power and large-scale civil projects, Bemco also has a few transmission, refrigeration and water-processing projects to its credit.

As Saudi Arabia moves toward privatizing power ventures, Bemco is looking to participate in the development and funding of independent power project ventures, in addition to expanding its operations in neighboring countries and North Africa. The company also has partnered with several foreign firms on domestic and overseas projects. Bemco's service subsidiary, Bemco Services Company, provides startup, commissioning, operations and maintenance services, while Bemco Steel Industries is primarily involved in the production of structural steel components, vessels and tanks.

With Saudi Arabia's power demand growing at a 7% annual rate, the country's installed capacities are expected to reach at least 75,000 MW by 2025, from the country's current level of about 36,000 to 40,000 MW. Ongoing power ventures in Saudi Arabia include:

• The 1,700-MW Yanbu independent water and power project (IWPP), due in 2013
• The 2,745-MW Jubail IWPP, slated for 2010
• The 1,200-MW Shuaiba extension project, to be completed in 2013
• The 2,400-MW captive power plant at Jizan Economic City, to be brought online in 2013
• The Qassim and Madina East substations, 380 kilovolts (kV) each, scheduled to be completed in 2010
• Phase 6 expansion operations at the Tabouk power plant, slated for 2010
• Uprate of the Wadi Al Dawasir power plant, due for completion in 2011
• Grid connectivity of the Qassim power plant, expected to be completed by the end of next year

As early as 2004, the Saudi Arabian government had planned to build 10 new IWPPs by 2016 to cater to the power requirements of the capital city of Riyadh. A few other cities in the country--Medina, Mecca, Shoaiba, Jubail and Yanbu--also are expected to benefit from these projects.

Saudi Electricity Company (SAU:5110) (SEC) (Riyadh, Saudi Arabia) allotted $7.4 billion in 2008 toward power projects, looking to add about 2,670 MW of power-generation capacity through more than 300 different ventures involving generation, transmission and distribution of power. SEC's power sector investments for the period 2006-15 are estimated to exceed $20 billion.

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