Saudi Arabia has taken another step in expanding its energy infrastructure by awarding a $2.6 billion contract for the construction of a 3-gigawatt (GW) combined cycle gas-fired power plant in the Kingdom’s Eastern Province. The project, a collaboration between Spanish and Egyptian firms, aligns with Saudi Arabia’s broader goal of increasing its electricity generation capacity from natural gas.
The contract was awarded to a 50-50 joint venture between Egypt-based Orascom Construction and Spanish energy infrastructure firm Técnicas Reunidas. The two companies signed an Engineering, Procurement, and Construction (EPC) agreement for the Qurayyah Independent Power Project (IPP) Expansion.
Key Players in the Project
The EPC contract was signed with Hajr Two Electricity Company, a consortium that includes ACWA Power, Saudi Electricity Company, and Haji Abdullah Alireza & Co. Ltd. As part of the agreement, Orascom Construction and Técnicas Reunidas have already received a Limited Notice to Proceed, allowing early-stage work to begin. 
The Qurayyah IPP Expansion will include a 380-kV electrical substation and will be designed with carbon capture readiness, reflecting Saudi Arabia’s commitment to integrating cleaner energy solutions within its power sector.
Osama Bishai, CEO of Orascom Construction, highlighted the significance of the deal, stating, “This contract builds on our success in the power sector, particularly in Egypt, and we are excited to bring our expertise to Saudi Arabia to support its growing energy needs.”
Saudi Arabia’s Strategy for Energy Expansion
As part of its Vision 2030 initiative, Saudi Arabia is ramping up electricity production from natural gas, with state oil giant Aramco spearheading efforts to increase domestic gas output. This initiative is crucial for meeting rising electricity demand and reducing reliance on liquid fuel power generation.
Saudi Arabia has also been awarding several large-scale contracts to international energy and engineering firms. Earlier in March, Siemens Energy secured a $1.6 billion deal to provide critical technologies for the Rumah 2 and Nairyah 2 gas-fired power plants. These plants, located in the western and central regions of the Kingdom, will add 3.6 GW to the national grid—enough to power approximately 1.5 million homes. Initially operating in simple cycle mode by 2027, the facilities will transition to full combined-cycle operation the following year.
With projects like the Qurayyah IPP Expansion, Saudi Arabia continues to strengthen its energy infrastructure, reinforcing its position as a key player in the global energy market while pursuing long-term sustainability goals.
