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Wed 29 Jul 2009 10:10 AM

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Saudi signs $720m Yanbu power deal with South Korea

Deal for two steam turbine plants at Yanbu Industrial City to increase output.

Saudi Arabia has signed a SR2.7bn ($720m) deal with a South Korean firm to increase energy output at Yanbu Industrial City, it has been reported.

Marafiq power and water utility company awarded the contract to Hanwha Engineering and Construction Company to build two steam turbine generator plants at Yanbu, reported the Saudi Gazette.

“Because of the rapid industrial expansion of Yanbu, the new power generation plants will greatly enhance our power capacity and will help us meet the ever-growing utility demand of the industrial sector,” said Thamer Al-Sharhan, president and CEO of Marafiq.

Construction work is expected to take 36 months. Once operational the plants will increase Marafiq’s power output to 1,500 megawatts.

The first unit is to start commercial production by May 2012 and the second to be commissioned by July 2012.

The Yanbu Industrial City is undergoing major expansion works, like Jubail. Officials said subcontract work will go to local contractors who meet the standard criteria, the paper reported.

The Marafiq Independent Water and Power Plant (IWPP is to start commercial production in January, the paper reported. The plant will market its generated electricity through the Saudi Electricity Company (SEC).

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