Saudi Project is World's Largest Combined-Cycle IPP

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--ACWA Power (Riyadh, Saudi Arabia) has begun work on what is claimed to be the world's largest combined-cycle independent power project (IPP) at Qurayyah, on the eastern coast of Saudi Arabia.

Saudi Electric Company (SEC) (Riyadh) signed the $2.85 billion power plant deal for construction of the 3,927-megawatt (MW), two-phase, gas-fed project with a consortium led by Saudi Acwa Power, which includes Samsung C&T and Mena Fund. The project company, Hajr Electricity Production Company, is owned equally by the consortium and SEC.

The project is being developed on a build, own, operate (BOO) basis. Under a 20-year power purchase agreement, the facility will start delivering power to SEC by the end of June 2014. The plant will be sited near other SEC power projects that are under development.

Siemens (NYSE:SI) will supply the generating equipment and electrical systems for the project, including six 654.5-MW turbine gensets, with each unit consisting of two gas turbines, two heat-recovery steam generators (HRSGs) and one steam turbine.

Samsung C&T Corporation (SEO:000830) (Seoul, South Korea) is the engineering, procurement and construction contractor for the project, which when completed will be operated by The First National Operation & Maintenance Company (Nomac), an ACWA Power subsidiary under a long-term operation and maintenance contract, with Siemens providing parts and services for the gas turbines.

Project funding will be $730 million in equity capital through an equity bridge murabaha facility provided by a grouping of international and Saudi banks and will include Arab National Bank Funding of $2.07 billion.

Yousef Alouhali, executive managing officer of Hajr said that the project was bid with the lowest tariff possible at 21% lower than the nearest competing bidder and thus would deliver $533 million in savings over 20 years to Saudi Arabia.

"The project has been designed with the highest thermal performance possible of more than 52% efficiency, or 14% more efficient than the traditional thermal plants existing in the country, which makes it Saudi Arabia's most efficient power plant," said Alouhali. This high-efficiency project will save the Kingdom more than $533,000 per year in fuel costs, using the present world natural gas price," he added.

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