GE signs nearly $700MM agreements for new gas-fired power plant in Saudi Arabia

Source: GE Energy

GE (NYSE: GE) has signed agreements worth approximately $700 million to supply power generation equipment and long-term services for a new gas-fired, independent power plant that will help Saudi Arabia, the Middle East’s largest economy, to meet a growing need for residential and industrial power. The new power plant, Riyadh PP11, will constitute 15 percent of the power generation capacity in Saudi Arabia’s central region.

According to Saudi Electricity Company (SEC), Saudi Arabia’s demand for reliable electricity is increasing at a rate of 8 percent a year. The new project, Riyadh PP11, is located at Dhuruma, about 80 kilometers west of the Saudi capital city of Riyadh, and will add nearly 1,730 megawatts of power to SEC’s grid. Saudi Arabia, which has an installed capacity of 44,000 megawatts, is expected to need about 70,000 megawatts of power by the year 2020. 

“As the first gas turbine independent power plant for SEC, the Riyadh PP11 project reflects our strategy to engage the private sector in the development of new power plants and to adopt innovative energy technology to increase the efficiency of our power production,” said Eng. Ali Saleh al-Barrak, president and CEO of SEC. “Working with a global technology leader like GE on this key project will help us meet the need for additional power throughout the Kingdom. It also builds on the strong relationship between SEC and GE which spans over 40 years.” 

In addition to meeting the rising demand for power, Riyadh PP11 also is designed to address Saudi Arabia’s environmental needs. The plant will feature GE’s high efficiency, F technology, gas turbines and advanced emissions control with dry low NOx technology and will use natural gas, a cleaner burning fossil fuel, as its primary fuel. 

“GE is proud to be part of this landmark power project for the Kingdom of Saudi Arabia. We are committed to supporting the Kingdom’s continued growth by delivering proven technology and experience for independent power projects such as Riyadh PP11,” said Joseph Anis, GE Energy’s president for the Middle East. “This also reflects our continued commitment to help the Kingdom and the region meet their water and power needs as well as their environmental responsibilities.” 

For Riyadh PP11, GE will supply seven Frame 7FA gas turbines and two D11 steam turbines. In addition to providing the equipment, GE also has signed a contractual services agreement (CSA) and will supply spare parts and maintenance services for the gas turbines over the next 20 years. GE’s CSAs are designed to ensure the long-term availability and reliable operation of power plants. 

To date, GE has more than 400 installations at SEC sites throughout the country, providing the Kingdom with over 20,000 megawatts of power. Recent examples of other major GE projects in Saudi Arabia include the supply of more than 30 gas turbines for SEC’s Riyadh PP10 project, steam turbines for the expansion and conversion of SEC’s Qurayyah power plant, as well as power generation equipment for the Marafiq Independent Water and Power Project in Saudi Arabia’s Eastern Province, the largest combined power generation and desalination plant in the world. 

The owner and operator of the plant is Dhuruma Electricity Company, which was formed by SEC and a consortium consisting of GDF Suez of France, Aljomaih Group of Saudi Arabia and Sojitz of Japan. Hyundai Heavy Industries (HHI) of South Korea is in charge of design and construction of the plant. 

Shipment of the equipment for Riyadh PP11 will begin in 2011. The first phase of the project, totaling 788 megawatts, is scheduled to enter commercial operation in mid 2012, while the second phase, totaling 941 megawatts, is scheduled to enter full operation by mid 2013.

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