JEDDAH, 21 December 2003 — The Saudi Arabian Oil Company (Saudi Aramco) signed a major investment agreement yesterday with a private-sector consortium comprising International Power and Saudi Oger to finance and implement four cogeneration projects for Saudi Aramco’s account.
According to a statement from Saudi Aramco, the projects will produce over 1,000 kilowatts of electricity and more than four million pounds of steam per hour.
The projects will be implemented under the build-operate-own-transfer business model, whereby the investor transfer title to Saudi Aramco 20 years after operations start. Saudi Aramco will connect the new projects, whose total value exceeds SR2 billion, to its existing facilities.
Under the agreement, Tihamah Company, a subsidiary of the International Power-Saudi Oger consortium, will build, finance and operate industrial facilities for cogeneration of electricity and steam at four important operating sites of Saudi Aramco in the Eastern Province, i.e., Uthmaniyah, Shedgum, and Juaymah Gas Plants and Ras Tanura Refinery. Title to these projects will be conveyed to Saudi Aramco upon expiration of the agreement’s 20-year term. Implementation is expected to start in the first half of 2004 and will be completed in increments during the year 2006. The projects will supply Saudi Aramco’s cogeneration facilities with gas and water required for power and steam generation.
“In addition to the investment advantages offered by the BOOT model, the cogeneration system itself features important environmental and technological advantages, which will enhance the environmental performance, operating efficiency and energy conservation of the industrial facilities they supply,” the statement said.
Local contractors are expected to participate in the construction activity, estimated at billions of riyals. Furthermore, the total operation, maintenance and support services costs in which local contractors, vendors and suppliers are expected to participate are estimated at about SR100 million per year.
