RIYADH, 13 December 2003 — Saudi Arabia’s state-owned oil and gas giant Aramco said yesterday it has launched a private finance initiative worth SR2 billion ($533 million) to build power stations supplying four of its industrial sites in the Eastern Province.
A special purpose company, jointly owned by a Saudi and foreign company, would be created to build, finance and operate the “cogeneration” power plants, said an Aramco statement sent to AFP.
They would produce more than 1,000 megawatts of electricity and more than four million pounds (1.8 million kilos) per hour of steam, it added.
Aramco said it would supply the power plants with the needed gas and water, and would take over ownership of the plants from private-sector operators 20 years after the start of operations, expected in phases in 2006.
The company’s present electricity and steam needs come from two different sources, but the future “cogeneration plants will enhance efficiency by combing the production,” it said.
“This will be the first large-scale independent power project (IPP) to be undertaken in the Kingdom by the private sector,” said Aramco.
In early July, the Saudi Petrochemical Company announced a deal worth $170 million for the construction of its own power generation plant.
According to official estimates, the Saudi power sector requires investments of more than $90 billion until the year 2023.
The Saudi electricity sector has been undergoing major restructuring following the complete lifting in April 2000 of government subsidies for electricity.
The Kingdom also established a “regulator” in the power sector in the interests of consumers, operators and investors, and to lure foreign investments.