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Showa Shell, Saudi Aramco to form solar power JV

Japanese oil distributor Showa Shell Sekiyu KK (5002.T) and Saudi Aramco Oil Co plan to jointly set up small-scale solar power facilities in Saudi Arabia next year, the Nikkei business daily reported without citing sources.

Showa Shell, Japan’s fifth-biggest oil refiner, aims to turn solar cells into a key business because domestic demand for gasoline and other oil products is expected to weaken sharply, Nikkei said.

It also plans to boost its solar cell production capacity from 80,000 KW to 1 million KW by around 2011, the paper said.

Showa Shell and the Saudi Arabian state-run oil company intend to choose several sites in Saudi Arabia for constructing power plants capable of generating 1,000 KW to 2,000 KW, the Nikkei said.

The facilities, which do not require large initial investments like fossil fuel and nuclear power stations, were to be constructed in areas not served by power grids, the daily said.

The companies expect these plants to generate about 10,000 KW for total estimated cost of several billion yen, it said.

The project is to use copper indium diselenide solar cells, which are cheaper than conventional cells as they do not contain silicon, produced at a Showa Shell’s Miyazaki Prefecture factory, the paper said.

Once the project gets on track, Showa Shell and Saudi Aramco plan to establish a joint venture around 2012 for similar operations in emerging countries in the Middle East, Southeast Asia, Africa, Latin America and elsewhere, it said.

Tokyo Electric Power Co (9501.T) is to provide support in power generation and the operation of power distribution equipment, the Nikkei said.

The companies would later start similar kind of facilities in emerging countries in the Middle East, Southeast Asia, Africa, Latin America and elsewhere., the paper said.



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