Showa Shell Sekiyu K.K. said Wednesday it will embark on a multibillion yen solar power generation project with Saudi Arabian Oil Co. in 2010.
The project, which will also involve the oil distributor's wholly owned subsidiary, Showa Shell Solar Co., will seek to deliver electricity to homes and schools, including in regional areas in Saudi Arabia that lack sufficient power infrastructure, Showa Shell Sekiyu officials said. Saudi Arabian Oil is a state-run firm better known as Saudi Aramco.
The two partners will first set up small, prototype solar power stations in several locations in the oil-rich country to conduct a feasibility study.
Showa Shell Sekiyu will export solar cells from its subsidiary's two manufacturing plants in Miyazaki Prefecture.
The production of the cells is estimated to cost ¥2 billion to ¥3 billion. The project must also cover the building costs of the trial power stations.
Once the project is well under way, Showa Shell Sekiyu and Saudi Aramco may form a joint venture to conduct a similar power business in emerging economies, said the officials.
The two companies already have close ties, with the Saudi firm owning an equity stake of around 15 percent in Showa Shell Sekiyu as of Dec. 31.