DUBAI - Saudi Arabia's Saline Water Conversion Corporation (SWCC) has hired BNP Paribas to advise it on the sale of its $7.2 billion Ras Al Khair desalination plant, a source close to the matter said on Thursday.

The desalination and power plant is one a number of state assets that the government is selling as part of a privatisation drive to reduce pressure on its capital spending and to diversify government revenues away from oil.

SWCC did not immediately respond to a request for comment. BNP Paribas declined to comment.

The plant, which has been operational since 2014, once at full capacity will deliver 1.025 billion cubic metres of desalinated water every day to Riyadh and other areas.

SWCC asked banks to submit proposals for the deal in June.

Along with BNP Paribas, other banks including GIB Capital, Mizuho, Sumitomo Mitsui Banking Corporation (SMBC), HSBC and Standard Chartered were approached for the deal, sources told Reuters in August.

SWCC is also working on a number of water and power projects to be developed on a public-private partnership basis.

According to Saudi Arabia's state news agency, SWCC has hired legal, financial and technical advisers for the construction of two desalination plants, one located in Al-Shuqaiq in the bordering areas of Jazan and Asser, and one located on the Red Sea coast town of Yanbu, which will be serving the holy site of Medina.

(Reporting by Davide Barbuscia; Editing by Keith Weir) ((;))