Saudi Aramco signed a series of four energy conversion agreements on Saturday, December 20, 2003 with a private-sector consortium comprising International Power of the UK and Saudi Oger to implement four cogeneration projects for the supply electricity and steam.
The projects will produce over 1,000 megawatts of electricity and more than four million pounds of steam per hour, stated a press release. The projects will be implemented under the Build-Operate-Own-Transfer (BOOT) business model, whereby the investors will build, own and operate the cogeneration facilities and transfer them to Saudi Aramco 20 years after commencement of commercial operations.
Saudi Aramco will construct the facilities required to connect the new projects, whose total value will exceed two billion Saudi riyals ($533 million), to its existing facilities.
Under the agreement, Tihama Company, a joint venture of the International Power-Saudi Oger consortium, will build, finance and operate cogeneration facilities at four key Saudi Aramco operating sites in the Eastern Province: 'Uthmaniyah, Shedgum, and Ju'aymah Gas Plants and Ras Tanura Refinery. Ownership of the facilities will be conveyed to Saudi Aramco after 20 years.
Implementation is expected to begin in the first half of 2004 and to be completed in phases during 2006. Saudi Aramco will supply the cogeneration facilities with gas and water required for power and steam generation.
Local contractors are expected to participate in a major way in the construction activity, estimated at hundreds of millions of Saudi 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 SR 100 million per year. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
