Korea Electric Power Corporation (KEPCO) has won the contract for the Jafurah Phase 2 cogeneration power plant project ordered by Saudi Arabia. Following the Phase 1 project, which is scheduled for completion later this month, KEPCO has secured the Phase 2 contract on its own, a development that analysts say has strengthened Team Korea's position in the Middle East energy market.
KEPCO announced Monday that it had signed a contract with Saudi Aramco, Saudi Arabia's state-owned oil company, for the construction and operation of the Jafurah Phase 2 cogeneration plant and the sale of electricity and steam. Doosan Enerbility will participate in construction, while the Export-Import Bank of Korea will provide financial support. The Jafurah Phase 2 plant has a capacity of 331 MW and will produce approximately 465 tons of steam per hour.
KEPCO plans to complete the plant by June 2029. The company expects the construction process to generate approximately 1.2 trillion won in overseas joint export effects for Korean companies. Operation of the plant will be handled by a special purpose company (SPC) jointly established by KEPCO and Aramco. After completion, the Jafurah Phase 2 plant will supply electricity and steam for 17 years, generating an estimated 2.1 trillion won in revenue.
KEPCO had previously won the contract for the Jafurah Phase 1 plant (317 MW). The Phase 1 plant marked KEPCO's first overseas cogeneration project. The Jafurah plant is located near the Jafurah gas field, about 400 kilometers east of Riyadh, the Saudi capital.
The Jafurah gas field is a key hub in Saudi Arabia's effort to broaden its oil-centered energy structure to include gas. According to Aramco, Jafurah holds 229 trillion standard cubic feet of raw gas and 75 billion barrels of condensate. Aramco aims to produce 2 billion standard cubic feet of sales gas per day at the site by 2030. As Saudi Arabia reduces its use of crude oil for domestic power generation and expands gas-based power and industrial infrastructure, the Jafurah plant's role is also growing.
KEPCO has been steadily building its order record in the Saudi power market. Starting with the Rabigh heavy oil-fired power project (1,200 MW) in 2009, the company has won a string of contracts including the Sadawi solar project (2,000 MW), the Rumah 1 and Nairyah 1 gas combined cycle projects (3,780 MW) in 2024, and the Dawadmi wind project (1,500 MW) in 2025. Project financing of 5.5 trillion won for the Sadawi solar and Rumah 1·Nairyah 1 gas combined cycle projects was also completed last year.
KEPCO is expanding its overseas power business by minimizing guarantee burdens and raising funds based on the profitability and credit of local project companies. Building on the Jafurah Phase 2 project, the company plans to accelerate its bids for additional contracts in Saudi Arabia. With Aramco scheduled to order follow-up cogeneration projects in the second half of this year, KEPCO intends to expand its business areas to include gas combined cycle generation, renewable energy, power grids, and energy storage systems (ESS).
"We will form Team Korea with domestic companies to expand joint entry into the Middle East market," a KEPCO official said.
