TAQA and JERA Reach Financial Close for Najim Cogeneration Company

TAQA and JERA Close Financing Deal for New Cogeneration Plant in Saudi Arabia

Abu Dhabi National Energy Company PJSC (TAQA) and Japan’s JERA Co. have finalized the financial arrangements for the Najim Cogeneration Company Limited, representing a significant milestone in the establishment of a cutting-edge industrial cogeneration plant in Jubail, Eastern Province, Saudi Arabia. The plant, designed to supply electricity and steam to a petrochemical complex, will utilize advanced combined cycle gas-fired technology to generate up to 475 megawatts (MW) of power and 452 tonnes per hour (TPH) of steam.

The joint venture between TAQA (51%) and JERA (49%) operates under a 25-year build, own, and operate (BOO) agreement with the potential for a five-year extension. Both companies will oversee the operation and maintenance (O&M) through a dedicated special purpose entity.

This development follows the signing of a Power and Steam Purchase Agreement in March 2024 between TAQA, JERA, and Saudi Aramco Total Refining and Petrochemical Company (SATORP), ensuring a consistent supply of power and steam for the petrochemical complex.

Farid Al Awlaqi, CEO of TAQA’s Generation business, underscored the significance of this milestone, emphasizing TAQA’s dedication to growth and operational excellence. Notably, the project, incorporating the latest J-Class gas turbine technology, represents TAQA’s third generation endeavor in Saudi Arabia.

Similarly, Steven Winn, Chief Global Strategist at JERA, emphasized the collaboration's importance, highlighting the plant's role in supporting SATORP’s expansion efforts and setting new benchmarks in operational efficiency and sustainability.

This strategic move by TAQA and JERA aims to provide state-of-the-art energy solutions supporting Saudi Arabia’s industrial sector growth and contributing to the region’s long-term energy sustainability.

Key Takeaways

• TAQA and JERA have sealed financing for a new cogeneration plant in Saudi Arabia.
• The plant will generate 475 MW power and 452 TPH steam for SATORP expansion.
• It operates under a 25-year BOO agreement with a potential 5-year extension.
• Utilizes advanced J-Class gas turbine technology for enhanced efficiency.
• Supports Saudi Arabia's industrial growth and long-term energy sustainability.

Analysis

The collaboration between TAQA and JERA underscores a strategic move towards advanced energy solutions in the region, leveraging J-Class gas turbine technology to enhance operational efficiency and support industrial expansion. The 25-year BOO agreement and potential extension provide stability, benefiting both companies financially. Ashore, with emphasis on SATORP's growth, indirectly serving Saudi Arabia's petrochemical sector and energy sustainability goals. This project signifies a significant milestone in ongoing efforts to influence regional energy policies and investments.

Did You Know?

• Cogeneration Plant: A cogeneration plant, also known as a combined heat and power (CHP) plant, is an efficient and environmentally friendly facility that simultaneously produces electricity and useful heat from a single fuel source. The Najim Cogeneration Company Limited plant will use advanced combined cycle gas-fired technology to primarily serve a petrochemical complex, showcasing its versatility and sustainability.
• Build, Own, and Operate (BOO) Agreement: This contractual arrangement in the energy sector features a 25-year commitment from TAQA and JERA, showcasing their long-term investment and operational involvement, without transferring ownership to an external entity.
• J-Class Gas Turbine Technology: The use of J-Class gas turbines in the Najim Cogeneration plant emphasizes the push for superior performance, higher efficiency, and lower emissions, aligning well with sustainability goals and future energy partnerships.