Saudi Electricity Co has awarded contracts for South Korea's Hyundai and Japan's Mitsubishi to build and supply equipment for a large power plant in Jeddah, SEC said on Monday.
Hyundai Heavy Industries (HHI) will build the 2,650-megawatt power plant known as Jeddah South, while Mitsubishi Heavy Industries (MHI) will supply equipment for the oil-fired plant.
The construction of the plant means Saudi Arabia, the world's largest crude exporter, will continue to burn millions of barrels a week of oil for power generation for years to come.
But SEC expects the more efficient plant, to burn much less fuel oil per unit of electricity produced.
"We are using for the first time in the kingdom super critical boilers which have a higher efficiency, reaching up to 40 percent efficiency in fuel consumption," SEC's chief executive Ali bin Saleh al-Barrak told Reuters in an interview.
SEC said in a bourse statement earlier on Monday that it had approved the award of an SR11.96bn ($3.12bn) contract to build the plant but did not identify the winner.
The contracts for Jeddah are expected to be signed in the next few weeks, with contracts to build a similar-sized oil fired power plant at Shuqaiq awarded in late 2013, Barrak said.
Technical bids for the 2,600 MW Shuqaiq, a super critical fuel oil plant fitted with sulphur removing technology, are due in the first quarter of next year, Barrak said.
The state-run company also plans to spend around $35bn on high voltage power lines, with another $25bn spent on distribution networks over the next 10 years.
SEC has an installed capacity of 54,000 MW and will add around 4,000 MW over the next 12 months to help meet rising demand, with another 8,000 MW of capacity to be added in 2014.For all the latest construction news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.