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Jizan scheme to spark opportunity

Pioneering project at Jizan a lure for gas specialists and could lead to European and Far East tie-ups

Saudi Aramco’s ambitious gasification project next to the Jizan refinery has created a buzz in the kingdom that only pioneer technologies bring.

The gasification process is perfect for coal or heavy crude oil and the process is very close to that of refining. The oil is heated to a high temperature before being injected with gas or steam to create synthetic gas, or ‘syngas’ as it is called. This gas is then used to drive turbines to create power.

The UK/Dutch Shell Group is providing the technology for this project and the budget could be as high as $5bn.

The scheme has attracted a large number of international contractors, but Aramco is making it clear from the outset that only companies with the requisite experience will be allowed to bid for the specialist packages.

This is why there are no South Korean contractors on the eight-company shortlist for the gasification package. The only company with experience in gasification from South Korea is Doosan Heavy Industries & Construction, but it is not taking part.

However, the South Koreans still have a chance to partner some of the companies invited to prequalify and many are in talks to form consortiums to be as competitive as possible at the bid stage.

It should make contracting executives in Seoul very happy that the model of aggressive pricing and swift execution they pioneered has become so powerful in the Middle East. It is getting to the point, especially in the plant project market, where any contract bid round not containing a South Korean name makes clients believe that it is going to cost them more money.

In reality, many Europeans and Japanese contractors are now also bidding with the same aggression. The South Koreans moved first, however, and will now probably always be regarded as offering the most value for money.