Saudi Arabia’s Polysilicon Technology Co. said it has awarded a $380 million contract to two South Korean companies for construction of the first stage of a plant to make polysilicon for use in solar-energy panels.

KCC Corp. and Hyundai Engineering & Construction Co. were selected to build the facility, which will have a capacity to produce 3,350 metric tons a year of solar-grade polysilicon, the Saudi company said in an e-mailed statement Tuesday. The factory will be located in the Persian Gulf port of Jubail, it said.

Privately owned Polysilicon Technology plans to triple the factory’s capacity in future phases. The statement did not give a timeline for the plant’s construction or for any future increases in its capacity. The company also did not specify whether the facility would supply polysilicon for export or for the domestic manufacture of panels.

Saudi Arabia, holder of the world’s largest crude oil reserves, is seeking to diversify sources of energy to reduce its reliance on hydrocarbons. Saudi Aramco, the world’s largest state-run company, said in its annual review last year that it looks to the sun as energy source to help it generate power and desalinate water locally.

Aramco has a contract with Japan’s Showa Shell Solar K.K., a unit of Showa Shell Sekiyu K.K., to develop a small-scale project for generating one to two megawatts of solar power in Saudi Arabia. If the project is viable, the companies will form a joint venture in 2012, Aramco said in last year’s annual review. 

(Bloomberg)