Korea Electric Power Corporation Wins $1.6 Billion Contract for Jafurah Phase 2 Project

Korea Electric Power Corporation (KEPCO) is accelerating its entry into the Middle Eastern energy market by securing the Phase 2 cogeneration project at Jafurah, Saudi Arabia.

On June 3, KEPCO announced that it successfully signed a power and steam sales contract for the construction and operation of the Jafurah Phase 2 cogeneration plant with Saudi Arabia's state-owned oil company, Aramco, and completed a construction contract with Doosan Enerbility.

The project involves constructing a cogeneration plant with a capacity of 331 megawatts and a steam production rate of approximately 465 tons per hour, which is expected to be completed by June 2029. KEPCO anticipates around 2.1 trillion won (approximately $1.6 billion) in revenue over the project's duration.

The Jafurah Phase 2 project is an expansion of the Jafurah Phase 1 cogeneration project (317 MW) that KEPCO secured through an international competitive bidding process in 2022. KEPCO plans to complete the Phase 1 project by the end of this month and was awarded the Phase 2 project based on its recognized technical expertise and operational capabilities gained during the first phase.

The Phase 2 project will be managed by a special purpose company (SPC) jointly established by KEPCO and Aramco, with construction led by Doosan Enerbility, financing provided by the Korea Export-Import Bank, and operations managed by KEPCO. This collaboration is expected to generate approximately 1.2 trillion won in export effects for domestic companies.

This contract is significant as it represents a comprehensive export model involving not only the construction of the power plant but also participation from domestic companies in operations, financing, and equipment supply. With Saudi Arabia pursuing large-scale energy transition projects, there are expectations for additional business opportunities in power generation, power grids, and energy storage systems (ESS) in the future.

Since starting with the Rabigh heavy oil power project in 2009, KEPCO has expanded its presence in the Saudi power market by securing contracts for the Jafurah Phase 1 cogeneration, the Sadawi solar power project, and the Rumah 1 and Nairiya 1 gas combined cycle projects.

A KEPCO official stated, "With this contract, we plan to expand our entry into the Middle Eastern market across various sectors, including gas combined cycle power, renewable energy, power grids, and ESS, and actively pursue the follow-up cogeneration projects that Aramco is expected to announce in the second half of the year."