Saudi Aramco is considering establishing, and then IPOing, a power company which will hold the power and steam generation assets which sit inside the fence of its vast industrial estate. A joint local bank/international bank mandate is currently being tendered for the role to advise on the proposal.

The timetable for establishing Powerco is tight with management approval set for November and board approval set for December. The idea has its complexities and is part of a plan to double Aramco’s cogeneration portfolio. The oil company’s current cogen supplier is Tihama Power Generation Company, a US$800m joint venture between International Power (IPR.L) and Saudi Oger, which produces 1,076MW of power and 2040 tonnes per hour of steam at four sites in the Eastern Province.