The new plant will supply Jazan Economic City with fuel and would help offer cheaper electricity to the factories currently operating and expected to operate there during the next 25 years.

The plan is estimated at $30 billion and is being developed by MMC Corp. Bhd and the Saudi Binladin Group, the New Straits Times reported.

One of the first beneficiaries will be an aluminum smelter to be built by MMC, the Binladin Group and Aluminum Corp. of China Ltd.

"The competitive tariffs at JEC will drastically reduce the smelter's production costs and give it an important competitive advantage to serve the growing world market for aluminum in a period of rising energy costs," said Feizal Ali, chief of MMC International.

The deal was signed by the Saudi Arabian General Investment Authority governor Amr Al-Dabbagh, Luo Jianchuan, President of Chalco, Feizal and Mohamad Saleh Binladin.

MMC will hold half of the power plant for JEC, which initially will generate 2,460 megawatts of electricity, and MMC also will have 50 percent of the port that will serve JEC. Construction of the smelter, power plant and port are due to start in the fourth quarter of this year.