Abu Dhabi National Energy Company, better known as Taqa, and Japan’s Jera have signed an agreement with a Saudi Aramco joint venture to build an electricity and stream generation plant in Saudi Arabia.
The plant, which is expected to be operational in 2027, will supply up to 475 megawatts of power and 452 tonnes per hour of steam to the planned $11 billion Amiral petrochemical complex in the city of Jubail in the kingdom's Eastern Province, the companies said on Thursday.
The Amiral petrochemical project, which will have one of the largest mixed-load steam crackers in the GCC region, is integrated with the existing Saudi Aramco Total Refining and Petrochemical (Satorp) refinery in Jubail.
Satorp is a joint venture between Aramco and France's TotalEnergies.
A steam cracker cracks light hydrocarbons such as ethane, propane and light naphtha to produce ethylene.
“Taqa is looking forward to developing an efficient cogeneration plant that reduces carbon emissions and supports Satorp with its long-term decarbonisation programme,” said Farid Al Awlaqi, chief executive, Taqa Generation.
“The agreement will bolster Taqa's efforts in building on our growth and executing on our 2030 goals.”
The electricity and steam plant will be developed by an entity owned by Taqa and Jera on a 25-year build, own and operate basis, which can be extended by five years on mutual agreement. Both the companies will also undertake the operation and maintenance of the plant through a special purpose entity.
The project includes provisions for the future installation of a carbon dioxide capture plant and the capability to run on hydrogen.
“The cogeneration plant will not only enhance the Amiral complex’s operational efficiency, but also demonstrates our commitment to environmental stewardship,” said Steven Winn, chief global strategist, Jera.
Last year, Aramco and TotalEnergies awarded contracts to build the Amiral petrochemicals complex.
The project will be capable of producing 1.65 million tonnes of ethylene and other industrial gases annually, the companies said at the time.
Aramco also said the expansion would attract more than $4 billion in additional investment in a variety of industrial sectors and create about 7,000 jobs directly and indirectly in Saudi Arabia.
Aramco, the world’s largest oil-exporting company, has been diversifying its operations to include a greater focus on the downstream sector, which includes refining and petrochemicals.
Petrochemicals, used in everything from clothes to car parts, are set to be a significant driver of crude demand growth in the next few decades.
Last year, Aramco closed a deal to acquire a 10 per cent stake in Shenzhen-listed Rongsheng Petrochemical for $3.4 billion.
In December, Aramco agreed to acquire a 40 per cent equity stake in Gas & Oil Pakistan (GO), a downstream fuels, lubricants and convenience store operator, marking its entry into Pakistan’s fuel retail market.
In September, the company also agreed to buy a 100 per cent equity stake in Esmax Distribuscion, a downstream fuels and lubricants retailer in Chile, from private equity company Southern Cross Group.
