Gulf Construction Online - Saudi Arabia kicks off world’s largest IPP

Regional News

Saudi Arabia kicks off world’s largest IPP

01 January 2012

A CONSORTIUM led by ACWA Power of Saudi Arabia recently issued notice to proceed with the construction of the largest independent power project (IPP) in the world, which will be located in the kingdom.

To be developed on a build, own, operate (BOO) basis, the Qurayyah IPP will be located on the eastern coast of Saudi Arabia adjacent to existing Saudi Electric Company (SEC) facilities, according to the Arab News.

The project, the third of its type and the largest IPP being developed by SEC, represents another major development in the Saudi power sector to help meet the rapidly increasing power demand in Saudi Arabia. It will deliver 3,927 MW of electricity to SEC under a 20-year power purchase agreement (PPA) commencing on June 30, 2014.

The project company, Hajr Electricity Production Company (Hajr), was established with the winning consortium owning 50 per cent and SEC owning the remaining 50 per cent.

The consortium includes Samsung C&T and Mena Fund.

“Qurayyah IPP is a greenfield independent power project with a net generation capacity of 3,927 MW,” Yousef Al-Ouhali, executive managing officer of the Hajr, said. “The design production capacity will make it the largest IPP combine-cycle gas-fired power plant in the world once completed.”

The project is being funded with $730 million of equity capital through an equity bridge Murabaha facility provided by various banks.

Qurayyah IPP comprises six identical groups of equipment, each delivering net output of 654.5 MW, according to the newspaper.

Each group comprises two gas turbines (GTS), two heat recovery steam generators (HRSG) and one steam turbine.
The Qurayyah IPP Plant is designed and will be constructed to comply with all applicable environmental laws, guidelines, regulations and standards set by World Bank, IFC and Saudi Presidency of Meteorology and Environment (PME).

Siemens will provide all major equipment and electrical systems and Samsung C&T will engineer, procure and construct the project as the engineering, procurement and construction (EPC) contractor to deliver the project. Once completed, the plant will be operated by The First National Operation and Maintenance Company (Nomac), a subsidiary of ACWA Power, under a long-term operation and maintenance contract with Siemens providing parts and services for the gas turbines under a long-term service agreement (LTSA) with Nomac.

Citing some of its major economic advantages, Al Ouhali said the project was bid with the lowest tariff possible (21 per cent lower than the nearest bidder), thus delivering over SR2 billion ($533 million) of savings over 20 years to the economy of the kingdom.

In addition, it is designed with the highest thermal performance possible, more than 52 per cent efficiency, or 14 per cent more efficient than the traditional steam power plants currently in operation in the kingdom.