US Energy group CMS Energy announced yesterday, that it has been named preferred bidder for the first privately owned independent power cogeneration project in Saudi Arabia. CMS are joint venturing on the SADEF cogeneration project with the A.H. Al-Zamil Group of Saudi Arabia. SADAF is a 50:50 joint venture between Saudi Arabia Basic Industries Corporation (SABIC) and Shell Chemicals.
The cogeneration project will supply 230 MW of power generation and 510 tons per hour of steam production capacity under a 20-year Energy Conversion Agreement. The project will be fuelled by natural gas supplied by SADAF. CMS Energy’s independent power unit, CMS Generation Co., will co-manage the construction and operation of the project through a joint project company.
“This opportunity to work with SADAF is significant for CMS since it positions the Company as an important player in the forthcoming private sector power development in the Kingdom of Saudi Arabia,” said Joe Tomasik, CMS Energy’s vice president of development. “The selection as preferred bidder clearly shows the continuing confidence clients such as SADAF have in CMS’s capabilities and its regional experience.”
Financial closure of the deal is expected shortly and construction work should commence before the end of the year.
CMS are seeking to grow their business in the region as countries takes steps towards privitization of their energy industries. In the United Arab Emirates, CMS are building and will operate the first major energy privitization project in that country, Al Taweelah A-2. This includes a power plant with generation capability of 710 MW as well as a water desalination plant.
CMS Energy Corporation has annual sales of $11 billion and assets of about $16 billion throughout the US and in selected foreign markets. It is involved in independent power production plants totalling 9742 MW with a further 4621 MW of plant capability under construction.
The Al-Zamil Group is one of the leading diversified industrial and commercial organizations and one of the most respected in the Kingdom of Saudi Arabia.