CORRECTED - Saudi awards $2.44 bln power plant deal -source

(Corrects completion date of Maaden-Alcoa plant in last paragraph)

* China's Sepco III, Saudi Al-Arrab to build power plant

* Cost of water and power project down to $3.9 bln

* South Korea's Doosan to build desalination plant

KHOBAR, Saudi Arabia, Sept 7 (Reuters) - Saudi state-owned Saline Water Conversion Corp (SWCC) has awarded a $2.44 billion power plant contract to a group led by China's Sepco III Electric Power Construction Corp, an industry source said on Tuesday.

The group, which includes Saudi Arabia's Al-Arrab Contracting Co, will build a 2,400 megawatt (MW) plant that will be integrated with a water desalination facility in Ras Azzour, on Saudi Arabia's Gulf coast.

Sepco III and Al-Arrab's bid was the lowest. [ID:nLDE64S01Y]

"A letter of award has already been sent to them and the contract will be signed soon," the source who declined to be identified said.

A SWCC spokesperson could not be reached for comment.

Last week, South Korea's Doosan Heavy Industries and Construction Co Ltd (034020.KS) said it had won a $1.46 billion contract to build the desalination plant. [ID:nLDE6800RK]

The plant, expected to be the world's largest when it comes on stream in 2014, will produce 1.025 million cubic metres of desalinated water per day.

The cost of the project is below initial estimates of $6 billion when Japan's Sumitomo Corp (8053.T) was leading a consortium to build and operate the plant.

SWCC will take 1 billion litres of the plant's water production capacity. Saudi Arabian Mining Co (Maaden) 1211.SE will take 1,350 megawatts, and 1,050 MWs will be allocated to Saudi Electricity Co (SEC) 5110.SE.

In Ras Azzour, Maaden and U.S. aluminium company Alcoa Inc (AA.N) are building a $10.8 billion aluminium project, which would be the world's largest fully integrated aluminium complex when completed in 2014. [ID:nLDE5BK0I5] (Reporting by Reem Shamseddine; Editing by Dave Zimmerman)