The award of the $3.3bn contract to Hyundai Heavy Industries (HHI) to build the 2,640MW Shuqaiq power plant in Saudi Arabia is the latest chapter in what has been a lucrative three-year period for South Korean contractors in the kingdoms power sector.
Since 2010, South Korean contractors have been awarded contracts to build 18,875MW of the total 29,431MW power capacity awarded in the kingdom. This equates to 65 per cent of all EPC power deals awarded in this period.
HHI, in particular, has enjoyed success in the kingdoms vast power generation expansion programme. In addition to the Shuqaiq award, in October last year HHI was awarded the $3.2bn contract to build the 2,640MW Jeddah South plant. In April this year, it also finished work on the 1,730MW Riyadh PP11 (power plant 11), for which it began construction work in June 2010. HHI alone has been awarded 24 per cent of the total capacity awarded in Saudi Arabia since the beginning of 2010.
In December 2012, Samsung Engineering was awarded the estimated $1.5bn contract to build the 3,100MW Yanbu 3 power plant for the Saline Water Conversion Corporation (SWCC), one of the largest capacity power planned in the kingdom. Combined with HHIs Jeddah South award, South Korean firms won 5,740MW of the 7,915MW of the major power plant contracts awarded in 2012, equating to 73 per cent.
South Korean contractors had also enjoyed a successful 2011 in the kingdoms power sector, with Daelim Industrial Company winning the $1.2bn contract to build the 1,200MW Shouaibah 2 combined-cycle plant in the final quarter of the year. This followed the successes of Samsung C&T on the 3,927MW Qurayyah independent power project (IPP) and Hanwha Engineering & Construction for the 850MW interim power and desalination plant at Yanbu earlier in the year.
In 2010, Doosan was awarded a $3.4bn contract to build the 2,800MW phase 6 of the Rabigh expansion, located on the west coast of the country about 150km North of Jeddah. The $3.4bn contract is the largest single conventional power plant contract a South Korean contractor has been awarded overseas. Prior to this, Doosan, in partnership with Saudi Bemco, had been appointed to build the 2,800MW Qurayyah combined-cycle conversion plant.
There will be plenty more opportunities for South Korean contractors to add to their order books in the coming years. The Saudi Electricity Company (SEC) is planning to tender 25,760MW of power capacity in the coming years, with the plants scheduled for commissioning between 2018 and 2025. The SEC is also planning to develop 4,250MW of capacity through three IPPs in the next few years. SEC forecasts that the kingdoms power demand will reach 120,00MW by 2030, from 43,000MW in 2010.