SAUDI Aramco is planning a major expansion of its power generation facilities to meet its growing electricity needs.
The move to develop a series of power stations solely for the state oil company’s use is understood to have been prompted by concerns within Saudi Aramco about the capacity of the kingdom’s electricity generation agency, Saudi Electricity Company, to provide the required level of power supply.

Saudi Aramco has appointed the UK’s HSBC to act as financial adviser on the development of six power plants, which are expected to cost a total of around SR3.8 billion ($1 billion).

Three of these could be expansions of existing plants owned by Saudi Aramco’s current power supplier, the Tihama Power Generation Company, a joint venture of the UK’s International Power and Saudi Oger. Initial meetings between Saudi Aramco and HSBC about the development have already begun.

Tihama currently has four plants in operation at Ras Tanura, Juaymah, Shedgum and Uthmaniyah and produces 1,076 MW of power for Saudi Aramco. It is not yet clear if the new plants will be tendered as one project, or three separate projects, or if the remaining three plants will be developed as expansions of Tihama sites, or just developed adjacent to the existing plants, according to a Meed report.

Saudi Aramco had also considered creating a new company to hold its power assets and floating it on Tadawul, the Saudi stock exchange, continuing the kingdom’s political objectives of giving the public a share in the country’s oil wealth.