Svergies Radio reported the documents, recently made public, show the Swedish Defense Research Agency is working on the project, which will include 35 buildings.
But Jan-Olof Linde, the head of the agency, said no such plan exists.
"Today, we have no ongoing projects with that country [Saudi Arabia], so I have no comments because we don't have any project," Linde told Svergies Radio.
Documents show the agency will take the lead role in construction of the plant, with help from several Swedish companies, SR reported.
Dick Strang, who had led the project until 2010, confirmed the agency's involvement.
In early 2008, the Swedish government did not want the agency to have responsibility for the project because of what The Local called the "sensitivity of the matter."
But Saudi Arabia wanted the agency to lead the project and the Swedish agency created a company, Swedish Security Technology and Innovation, to serve as a front for dealing with the Saudis but with the same people leading the project, the report said.
SSTI is, on paper, a private company without links to public agencies in Sweden so it didn't need government approval.
Green Party spokesperson Gustav Fridolin criticized Sweden's cooperation with Saudi Arabia.
"Sweden shouldn't ruin its good reputation by supporting military dictatorships," he said.
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