Consortium signs $3bn Saudi project deal

South Korea's Samsung Engineering and its consortium partners have signed a $3bn contract for a massive power project in Saudi Arabia.

The consortium partners, who also include Saudi-based Al Toukhi and China's Shanghai Electric, met with Saline Water Conversion Corporation (SWCC) to officially sign the contract for the Yanbu Power Plant Phase 3 project in the Gulf kingdom on Thursday.

The 3,100MW power plant will be built in Al-Madinah Province and will supply electricity to the Yanbu Industrial complex.

Under the contract, the power plant is slated to be completed in four years, Samsung said in a statement.

Samsung Engineering said its scope for the power plant includes engineering, procurement, construction and commissioning, on a lump-sum turnkey basis, with a contract value of $1.5bn.

At the signing, Park Ki-Seok, Samsung Engineering’s president and CEO, said: “This award represents Samsung Engineering’s strong standing in the power plant business, as it is the third power plant we have received in Saudi Arabia since 2011.

"We look forward to exceeding SWCC’s expectations with the safe and on-time delivery of the Yanbu power plant project.”

The new plant will have a capacity of 550,000 cubic metres per day of desalinated water and a power capacity of 2,500 megawatts.

Water consumption in the desert kingdom is already almost double the per capita global average and increasing at an ever faster rate with the rapid expansion of population and industrial development.

SWCC has said it plans to nearly double energy-intensive desalinated water production to almost 6 million cubic metres per day by the end of 2015.

SWCC's plants on the Red Sea coast burn oil - crude, fuel and cracked oil - while gas is used in those on the Gulf coast, the heart of the kingdom's oil wealth. The firm has 36 plants.