DHAHRAN, December 12, 2003 -- Saudi Aramco plans to launch a new investment program involving an agreement to implement a package of state-of-the-art cogeneration projects through Saudi and international investment under the Build, Own, Operate and Transfer (BOOT) business model.
Saudi Aramco will connect the new projects, whose total value will exceed SR 2 billion, to its existing oil and gas facilities.
Saudi Aramco's president and chief executive officer, Abdallah S. Jum'ah, said the program is in line with international trends in project implementation and supplements the Kingdom's plans for expanding its electric grid. It also utilizes the company's abundant gas supplies and bolsters the Government's efforts to attract international and local investors to help finance national economic development.
Jum'ah said that the interest shown by investors in this program is indicative of the high level of confidence the Kingdom enjoys and the diverse investment opportunities it provides.
Under this program, a project company consisting of two partners -- one Saudi company and one international company -- will develop, build, finance and operate industrial facilities to generate electricity and steam at four Saudi Aramco sites in the Eastern Province.
Together, the new projects will produce more than 1,000 MW of electric power and more than 4,000,000 lb per hour of steam.
This will be the first large-scale Independent Power Project ("IPP") to be undertaken in the Kingdom by the private sector. The projects will be transferred to Saudi Aramco after the expiration of the agreement's 20-year term.
The new cogeneration program enhances environmental performance and operational efficiency in the industrial facilities it feeds, thus contributing to environmental protection and power conservation.
At present, the electricity and steam required by Saudi Aramco's oil and gas processing facilities come from two different sources. The future cogeneration plants will enhance efficiency by combining the production of electricity and steam, which will be generated in a single facility featuring gas turbines
connected to heat recovery steam generators.
Implementation is expected to begin in the first half of 2004, and to be completed in phases during 2006. Saudi Aramco will supply the cogeneration projects with the gas and water required to produce electricity and steam.
Jum'ah expressed Saudi Aramco's satisfaction with this new initiative, which the company regards as an excellent opportunity to create additional successful partnerships with international and local investors renowned for their expertise.
He noted that Saudi Aramco has played, and still plays, a vital role in developing, supporting and enhancing the capabilities of the private sector. This allows local business to support the company's operations and also to contribute to the development of the national economy and the creation of new employment opportunities for citizens.
It is a source of pleasure, Jum'ah added, to see the Kingdom's private sector become mature enough to compete for and win bids for such major industrial projects. This gives the private sector and investors a greater role in Saudi Aramco's petroleum and support operations and creates a strategic depth upon which the company can rely in discharging its responsibilities and enhancing its leading role in the energy industry.