The Power & Utility Company for Jubail & Yanbu (Marafiq) has awarded a contract to South Korea’s Hanwha to build its Yanbu 2 power and water facility.

The contract, which is worth SR3.921bn ($1.05bn), was signed on 19 April in Riyadh. Hanwha will construct the plant, which will have a minimum capacity of 850MW on an engineering, procurement and construction (EPC) basis.

The desalination component of the project will have a capacity of 60,000 cubic metres a day (cm/d), using multi-effect desalination or multi-stage flash technology.

Yanbu 2 will be fired with heavy fuel oil. Arabian Light Crude will be available as a back-up fuel via a new pipeline from an existing oil terminal, located around 20 kilometres away.

The following companies submitted bids in November 2010:

• Arabian Bemco (Saudi Arabia)
• Hyundai Heavy Industries (South Korea)
• Samsung Engineering (South Korea)
• Hanwha (South Korea)
• Tecnicas Reunidas (Spain)
• Daelim (South Korea)

Marafiq decided to go ahead with the current Yanbu 2 scheme after plans to develop two separate independent water and power projects (IWPP) in the area were cancelled by the government in 2009.

In July 2009, Water & Electricity Minister Abdullah al-Hussayen announced Marafiq would merge its planned Yanbu IWPP with the Yanbu 3 IWPP planned by Saline Water Conversion Corporation (SWCC).

The government also decided to scrap plans to develop the joint project as a private utility scheme and instead said it would go ahead as an EPC contract.

Marafiq’s Yanbu 2 facility will help meet demand in the Yanbu area ahead of the completion of the merged project, which will have capacity of 1,700MW of power and 121 million g/d of desalinated water.