Saudi Electricity cancels power plant conversion project

Saudi Electricity Company (SEC) has shelved a project to convert its PP9 power plant in Saudi Arabia to a combined-cycle facility, MEED reported.

The step comes after the state utility picked its preferred bidder.

Last April, contractors had submitted bids for the scheme, with a consortium of Spain’s Initec Energia and Saudi Services for Electro Mechanical Works (SSEM) submitting the lowest lump-sum bid of $320m.

After selecting the Initec Energia/SSEM as preferred bidder, no further progress was made with the contract award and the PP9 expansion project has been cancelled, according to MEED.

The existing PP9 plant was constructed as a 1,200MW facility between 1995 and 2003 and, following a couple of expansions, the capacity reached 3,500MW by 2009. The proposed conversion scheme would have increased its capacity by about 240MW, MEED reported.

According to Bloomberg, the Saudi finance ministry has ordered government clients to not award any project contracts for the rest of the year, due to pressure on the government’s budget from falling oil revenues.