Business & Finance Club - Riyadh : GE has signed agreements worth approximately $700 million to supply power generation equipment and long-term services for a new gas-fired, independent power plant in Saudi Arabia.

The new power plant, Riyadh PP11, will constitute 15 per cent of the power generation capacity in the kingdom's Central region.

According to Saudi Electricity Company (SEC), Saudi Arabia’s demand for reliable electricity is increasing at a rate of 8 per cent a year.

The new project, Riyadh PP11, is located at Dhuruma, about 80 kilometers west of the capital city of Riyadh, and will add nearly 1,730 megawatts of power to SEC’s grid.

Saudi Arabia, which has an installed capacity of 44,000 megawatts, is expected to need about 70,000 megawatts of power by the year 2020.

In addition to meeting the rising demand for power, Riyadh PP11 also is designed to address Saudi Arabia’s environmental needs. The plant will feature GE’s high efficiency, F technology gas turbines and advanced emissions control with Dry Low NOx (DLN) technology, and will use natural gas, a cleaner burning fossil fuel, as its primary fuel.

“GE is proud to be part of this landmark power project for Saudi Arabia,” said Joseph Anis, GE Energy’s president for the Middle East.

For Riyadh PP11, GE will supply seven Frame 7FA gas turbines and two D11 steam turbines. In addition to providing the equipment, GE has also signed a Contractual Services Agreement (CSA) and will supply spare parts and maintenance services for the gas turbines over the next 20 years.

Shipment of the equipment for Riyadh PP11 will begin in 2011. The first phase of the project, totaling 788 megawatts, is scheduled to enter commercial operation in mid-2012, while the second phase, totaling 941 megawatts, is scheduled to enter full operation by mid-2016.