International Power, the UK subsidiary of French utility GDF SUEZ, is to expand its jointly-owned Tihama power production sites in Saudi Arabia after winning a contract extension through to 2026 from oil company Saudi Aramco.
The expansion will take place at three of the four existing sites and will generate additional capacity of 532 megawatts (MW) and 2,210 gigajoules per hour (GJ/h) of steam. Following the expansion, Tihama will have a total capacity of 1,595MW and 8,112GJ/h of steam.
Ownership of the expanded will be as per ownership of the existing sites, which are 60% owned by International Power and 40% owned by Saudi Oger.
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The total project cost for the expansion is estimated to be $430m, which is being funded by a mix of debt and equity in an 4:1 ratio. The expansion programme is expected to complete by 2015.
"Saudi Arabia is a key market for International Power in the Middle East, with important projects supported by long-term power purchase agreements and backed by very high quality off-takers," said Philip Cox, Chief Executive Officer of International Power.
The UK power producer, currently 70% owned by GDF SUEZ, is to become a wholly-owned subsidiary of the French nuclear power generator after the independent directors agreed to 418p per share cash offer from GDF SUEZ.
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