Saudi Aramco has awarded the air separation unit (ASU)/oxygen supply package for its Jizan Refinery and power plant complex to a consortium being led by the US’ Air Products.

The award is the last of the major packages for the 400,000 barrels a day refinery and adjoining 4,000MW integrated gasification combined-cycle (IGCC) power plant.

Air Products will execute the deal on a build-own-operate-transfer (BOOT) basis in conjunction with the local Acwa Holding and the length of the deal is 20 years. The exact budget has not been established but it is expected to be in the region of $2.1bn. Air Products will provide the technology and be responsible for the design and build as well as retain a 25 per cent stake. Acwa Holding is on board as an investor and will own 75 per cent.  

“The budget is high, but Aramco preferred to go with third party ownership rather than spend $1.4bn of its own money paying a contractor,” says an oil and gas executive working in Saudi Arabia. “It’s a lot higher than Aramco’s original forecast, but almost every package at Jizan has gone over its budget.”   

The ASU/oxygen supply package was initially much smaller and had a budget of circa-$500m in the initial scope of works for the Jizan refinery. However, with the inclusion of the IGCC power plant, the package gained far more importance as large volumes of oxygen are required for the gasification process. When completed the facility will be the world’s largest industrial gas complex and will supply 20,000 tonnes a day (t/d) of oxygen and 55,000 t/d of nitrogen.

Germany’s Linde was the original frontrunner for the project when Aramco was thought to prefer a conventional engineering, procurement and construction (EPC) model for the package. Linde’s bid was significantly lower at $1.4bn, but this would have involved no third party ownership and meant that Aramco would have had to foot the entire bill for the package.

MEED reported in late February that the Jizan refinery and IGCC power plant were expected to start respective construction phases in 2015 with a view to coming fully operational by 2018. The project is being executed in the Jizan Economic City in the southwest of Saudi Arabia.