Kepco to build USD 560 mn Jafurah phase 2 cogeneration plant

South Korea’s Kepco secured a contract from Aramco to build and operate the second phase of the Jafurah cogeneration project. The company signed a power and steam sales agreement with Aramco and an EPC contract worth c. USD 560 mn with Doosan Enerbility, which will build the facility and supply key equipment.

What’s in store? Kepco and Aramco will establish a special purpose vehicle to develop a 331 MW combined-cycle power plant capable of producing around 465 tons of steam per hour. The facility, which builds on the 317 MW first phase of the Jafurah cogeneration project, is scheduled to begin commercial operations by June 2029.

The project is poised to generate nearly USD 1.4 bn in revenue over 17 years through the sale of power and steam to Aramco. The wider consortium brings together Korean industrial and financial players. While Doosan Enerbility will lead construction, its subsidiary Doosan Skoda Power will manufacture and supply the steam turbines, with financing support from the Export-Import Bank of Korea.

This should not be confused with the broader Jafurah gas field development. Rather, the project forms part of the supporting infrastructure needed to operate the field. In addition to generating electricity, the plant will supply steam used in industrial processes required to extract and process natural gas.

SOUND SMART- Steam is a critical industrial utility used in gas processing, heating, separation, and other energy-intensive operations across upstream and midstream facilities. By generating power and steam from the same facility, the combined-cycle plant improves fuel efficiency, lowers operating costs, and reduces emissions compared with producing them separately.

The award adds to Kepco’s role in the Kingdom: In recent years, Kepco secured a stake in the 3.6 GW Rumah 1 and Nairiyah 1 combined-cycle power projects alongside Acwa and Saudi Electricity Company.