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Water company awards US$2.44 billion power plant deal

Saudi state-owned Saline Water Conversion Corp (SWCC) has awarded a US$2.44 billion power plant contract to a group led by Chinas Sepco III Electric Power Construction Corp, an industry source has been reported as saying. The group, which includes Saudi Arabias Al Arrab Contracting Co, will build a 2,400 MW plant that will be integrated with a water desalination facility in Ras Azzour, on Saudi Arabias Gulf coast. Sepco III and Al Arrabs bid was the lowest.

"A letter of award has already been sent to them and the contract will be signed soon," the source was quoted as saying by news agencies. A SWCC spokesperson could not be reached for comment.

Last week, South Korea's Doosan Heavy Industries and Construction Co Ltd announced that it had won a US$1.46 billion contract to build the desalination plant. The plant, expected to be the world's largest when it comes on stream in 2014, will produce 1.02mn cu/m of desalinated water per day.

The cost of the project is below initial estimates of US$6 billion when Japan's Sumitomo Corp was leading a consortium to build and operate the plant. SWCC will take one billion litres of the plant's water production capacity. Saudi Arabian Mining Co (Ma'aden) will take 1,350 MW, and 1,050 MWs will be allocated to Saudi Electricity Co (SEC).