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In $1.5B Deal with Siemens, Saudis Target Gas-Powered Plants

Saudi Arabia has signed a $1.5-billion deal with Siemens Energy for two gas-fired power plants that will produce electricity for the Kingdom as soon as 2026, with full operations to begin the following year, Gulf media reported on Monday. Siemens will supply the key components for the Taiba 2 and Qassim 2 power plants to be built in Saudi Arabia’s western and central regions, providing approximately 2,000 megawatts of electricity as the Kingdom seeks to change up its energy mix. China Energy International Group is Siemens’ contracting partner for the power plant project.The deal also includes a 25-year maintenance contract for Siemens. The Taiba and Qassim power plants, once built, will be among the largest and most efficient steam turbine power plants in the world, replacing a heavily oil-reliant structure. 

"Saudi Arabia is driving forward its vision 2030 to transform the Kingdom into a pioneering economic location. The new gas-fired power plants will provide reliable energy supply and contribute to the sustainable and future-oriented development of the country. Our Siemens Energy local service hub in Dammam will make an important contribution in expanding and localizing technology and competencies in the Kingdom,” Trade Arabia quoted Karim Amin, Member of the Managing Board of Siemens Energy, as saying on Monday. 

The Kingdom plans to spend $10 billion overall to expand its Master Gas System, laying new pipelines and upgrading operating systems in an attempt to make the shift from crude oil to natural gas. The two new gas-powered plants will save the country an estimated 60% in carbon dioxide emissions compared to oil-powered plants, according to The National news outlet.  

In the third-quarter of last year, Saudi oil giant Aramco launched a partnership with Siemens to develop a small-scale direct air capture test unit for managing carbon dioxide emissions. Aramco is hoping to use captured CO2 from the air in the production of lower carbon synthetic fuels, through two flagship demonstration projects in NEOM in the country’s northwest, and in Spain, according to the Aramco website.

By Charles Kennedy for Oilprice.com

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