Saudi Arabia has inked a substantial $1.5 billion agreement with Siemens Energy for the construction of two gas-fired power plants set to commence generating electricity for the Kingdom by 2026. According to reports from Gulf media on Monday, full operations are anticipated to kick off the following year.
The power plants, named Taiba 2 and Qassim 2, will be located in Saudi Arabia’s western and central regions. Siemens will be responsible for supplying the crucial components for these plants, which are expected to collectively produce around 2,000 megawatts of electricity. This move aligns with Saudi Arabia’s objective to diversify its energy sources.
Siemens’ contracting partner for this significant project is China Energy International Group. Along with the construction, the deal also encompasses a 25-year maintenance agreement for Siemens.
Upon completion, the Taiba and Qassim power plants are poised to be among the world’s largest and most efficient steam turbine power plants, marking a transition from heavy reliance on oil-based energy sources.
Karim Amin, a Member of the Managing Board of Siemens Energy, highlighted the significance of this venture in Saudi Arabia’s Vision 2030, aiming to position the Kingdom as an innovative economic hub. Amin emphasized the contribution of these gas-fired power plants towards ensuring a dependable energy supply and supporting sustainable development in the country.
As part of its broader strategy, Saudi Arabia intends to invest $10 billion in expanding its Master Gas System. This initiative involves the construction of new pipelines and upgrading existing systems, marking a strategic shift towards natural gas from crude oil.
The new gas-powered plants are expected to lead to a significant reduction of approximately 60% in carbon dioxide emissions compared to oil-based plants, as reported by The National news outlet.
In a separate initiative, Saudi oil giant Aramco collaborated with Siemens in the third quarter of last year to develop a small-scale direct air capture test unit. The aim is to manage carbon dioxide emissions, with plans to use captured CO2 in the production of lower carbon synthetic fuels. This initiative is part of two flagship demonstration projects located in NEOM in Saudi Arabia’s northwest and in Spain, as detailed on the Aramco website.