GE Energy Scores with Second $1 Billion Saudi Contract

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Researched by Industrial Info Resources (Sugar Land, Texas). Following the signing of three contracts with the Saudi Electricity Company (SEC) for the supply of a total of 23 F-class turbines in December 2006, GE Energy (NYSE:GE) (Atlanta, Georgia) has signed a new contract, which will total over $1 billion, for the Marafiq power generation and water desalination project and a second project agreement for the Riyadh Plant No. 9, also with SEC. For related news item see December 21, 2006 – GE $950 Million Contract Adds 2,900 Megawatts to Saudi Generation Capacity.

As part of an E+P+C (engineering, procurement and construction) consortium that includes Hyundai Heavy Industries (South Korea) and Societe Internationale de Dessalement (SIDEM) (Paris/Abu Dhabi) for the Marafiq project, GE will supply four combined cycle power blocks including 12 Frame 7FA gas turbines. The net plant output is set at more than 2,740 megawatts, with steam extraction for desalination. The GE scope of the project would also include steam turbines, generators, auxiliary equipment, heat recovery steam generators, distributed control systems, design and engineering, project management, technical advisory services, performance testing and plant maintenance.

The new facility will be owned Suez-Tractebel (20%), Gulf Investment Corporation (20%), Arabian Company for Water and Power Projects (20%) Marafiq – Power and Water Utility Company for Jubail and Yanbu (30%), and SEC and Saudi Public Investment Fund with 5% each. The project has been created by Marafiq to meet increasing demand from the booming industrial economy of Saudi Arabia.

Marafiq is the first private utilities company in Saudi Arabia. Based in Jubail Industrial City, it also provides services to Yanbu Industrial City. The company was formed by a Royal Decree to serve the industrial cities’ water and power supply requirements and power distribution to Yanbu.

A power shortfall projected for the central area of Saudi Arabia is the motivation for the E+P+C contractor Arabian BEMCO (Jeddah) to add 660 megawatts of power to Riyadh Power Plant 9. GE will supply 12 Frame 7EA gas turbines plus technical advisory services and performance testing. The true bines are scheduled to be shipped during the second half of 2007 and should go into commercial operation between February and June 2008. The primary feed for the power plant will be crude oil. GE’s Greenville, South Carolina plant will manufacture the gas turbines for both projects and the steam turbines for Marafiq will be built in Schenectady, New York.

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