Saudi SEC to spend $20 billion on projects

Amer al-Swaha, the head of six independent power producer (IPP) projects at Saudi Electricity Co (SEC), speaks at the Reuters Middle East Investment Summit in Riyadh, October 26, 2009.

RIYADH Oct 26 (Reuters) - State-controlled Saudi

Electricity Co 5110.SE plans to spend $20 billion to add more

than 10,000 megawatts (MW) of capacity through six independent

power producer (IPP) projects, a top official said on Monday.

Saudi Arabia is facing rapid power demand growth as it

builds infrastructure and heavy industry it hopes would

diversify its economy away from dependence on oil revenues. The

economic boom sparked by the oil rally of 2002-2008 contributed

to rapid economic growth.

Demand was growing at around 7 percent per year, Amer

al-Swaha, the head of IPPs at SEC, told the Reuters Middle East

Investment Summit.

SEC plans to spend $80 billion to add a total of 20,000 MW

through 2018, plus $20 billion on IPP projects.

Around $46 billion of the total investment would be spent on

power generation, $30 billion on transmission and $20 billion on

distribution, Swaha said.

IPP projects slated for completion from 2013 to 2021 include

the 1,200 MW Rabigh plant, the Riyadh 2,000 MW PP11 plant, a

2,000 MW Qurayyah plant, a 1,000 MW plant in Dheba, a 2,520 MW

plant in Ras Azzour and an 800 MW plant in Shuqaiq, Swaha said.

Five consortiums were preparing bids due on Dec. 7 for the

Riyadh plant, he said.

The consortiums were International Power with Saudi Oger and

Korea Electric Power Corp (KEPCO) (015760.KS); GDF Suez (GSZ.PA)

with Al Jomaih; Mitsubishi Corp (8058.T) with Acwa Power and

Japan's Tokyo Electric Power (9501.T); Tenaga Nasional Berhad of

Malaysia (TENA.KL), Sumitomo Corp (8053.T) and Saudi Binladin

Group.

The fifth consortium is Japan's Marubeni (8002.T) in an

alliance with Kansai Electric (9503.T) of Japan and Saudi

Masader, he said.

ENVIRONMENTALLY FRIENDLY

The Riyadh combined cycle plant would use gas and would cost

$2-$2.5 billion, Swaha said. Using gas would make the plant more

environmentally friendly than some plants in the kingdom that

use oil liquids, he added.

Tenders for the Qurayyah plant, which is expected to cost

$3-$3.5 billion, would be issued in the first half of 2010, he

said.

SEC manages 37,000 MW of power generation capacity from 45

plants.

It plans to almost double its generation capacity to 70,000

MW by 2020, Swaha said. SEC would close older plants, he added.

SEC was also considering investing in solar energy, as this

would allow the kingdom to export more oil rather than burn it

for power, he added.

“We are involved in a feasibility study for a 20 MW to 30 MW

solar power plant in the kingdom,” he said.

Around 40 percent of Saudi electricity capacity is fired by

gas, Swaha said. The rest is fired by oil liquids.

(Reporting by Reem Shamseddine; editing by Simon Webb and James

Jukwey)

((reem.shamseddine@thomsonreuters.com)