UPDATE 1-Showa Shell, Saudi Aramco plan solar power project
* Showa Shell, Saudi Aramco plan pilot plant next year
* To build small-scale facilities in Saudi Arabia
TOKYO, June 24 (Reuters) - Japanese oil refiner Showa Shell Sekiyu KK (5002.T) said on Wednesday it will start a solar power project in Saudi Arabia with Saudi Aramco to build small-scale facilities to supply electricity to local communities.
Showa Shell, Japan's fifth-biggest oil company, is ramping up investment in solar cells as it tries to become a major player in the alternative energy.
It hopes to generate new revenue streams besides gasoline and other oil products that are subject to market volatility.
Showa Shell said it and state oil company Saudi Aramco will build a pilot plant next year to conduct studies on the project, in which it plans to build facilities with generating capacity of 1-2 megawatts in Saudi Arabia serving communities without access to power grids.
Once the project gets on track, the two plan to establish a joint venture around 2012 and will target similar operations in emerging countries in the Middle East, Southeast Asia, Africa, Latin America and elsewhere, the Nikkei business daily said.
Showa Shell favours solar cells that use copper and indium instead of the more expensive silicon most commonly used in solar panels, and hopes to gain a 10 percent market share by 2014.
As the race heats up among rival solar cell makers such as Q-Cells (QCEG.DE) and Sharp Corp (6753.T), Showa Shell aims to stay competitive by offering comprehensive products and services to solar power generation businesses. (Reporting by Taiga Uranaka and Mayumi Negishi; Editing by Michael Watson)
