Saudi Aramco’s decision to press ahead with a cogeneration power and water plant at its Jafurah unconventional gas development as a public-private partnership (PPP) scheme shows its preference for attracting private partners to secure energy sources for its development programmes.
While the delay of the kingdom’s plans to launch an initial public offering (IPO) of up to 5 per cent of the world’s largest oil company has received much publicity, the planned Jafurah utilities plant reaffirms its commitment to securing private investment to finance projects.
This is not the first time Aramco has utilised the private developer model to build utilities plants. In 2012, it awarded a contract to a consortium of France’s GDF Suez (now Engie) and local Saudi Oger for the Tihama independent steam and power project (ISPP). This was followed in 2013 with the award of the projects under the third-party cogeneration programme to a consortium led by Japan’s JGC and Japan’s Marubeni.
Aramco continued its foray into the private power market in 2014 when it began the tendering process for the gas-fired Fadhili cogeneration plant as an independent power producer (IPP) project. The facility is being jointly developed by Aramco and state utility Saudi Electricity Company (SEC), with Aramco the offtaker for steam and water, and SEC the offtaker for the electricity.
Most recently, in August this year, MEED reported that local developer Acwa Power had signed an agreement with Saudi Aramco and US-based Air Products to acquire the assets of the estimated $8bn Jizan gasification and power development when it is commissioned.
With the opportunities for developing power projects in the kingdom having declined over the past three years, Aramco’s decision to tap the private sector will be very well received by regional and international investors.
You might also like...
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.